By James Langton
(September 21 – 09:00 EST) – Markets look set to head lower this morning. Contrary to expectations, Japan left its monetary policy unchanged, rallying its markets, but weakening the dollar picture in the U.S. Weaker oil prices and interest rate fears also have traders on edge.
In the U.S., traders were hit with some worse-than-expected trade data. The trade gap widened to almost US$25.2 billion in July. Economists were expecting a number somewhere less than US$24 billion.
Statistics Canada released trade data this morning too, revealing that Canada is doing its own part to boost the U.S trade deficit. Statscan says that exports passed the $30 billion mark in July, up 1.8% month over month. Imports also grew – up just 0.3%. This was the sixth straight month for imprt gains too.
Nevertheless the trade balance grew more than $400 million to $3.2 billion in July. Economists had expected it to grow to $2.7 billion, but June’s numbers were revised upward to $2.7 billion.
In Europe, weaker oil prices are sending its big energy stocks down. But the financials are on the way down too after European interest rate fears were sparked by some fresh economic data.
The FTSE 100 is down about 64 points in London so far. The German DAX has lost 60 points and the CAC 40 has dropped 56 points in Paris. That’s about a 1% fall across the board in European
stocks.
In Japan, traders seem to have accepted the powerful Yen and are jumping into growth stocks, leaving its exporters to their fate. It was expected that the Bank of Japan was going to make a serious move against the Yen by loosening the purse strings, after a series of failed overnight interventions. The Nikkei closed the day up more than 2%, adding 357.5 points on the day. The Yen also added about 2% after the BoJ’s decision was announced. In Hong Kong the Hang Seng index dropped 52 points on weaker blue chips.