Stock markets in Japan, Europe and the US are all trading lower to start the week along with commodities like crude oil and copper. There hasn’t been one big major development, rather, pessimism appears to be due to the combination of a number of smaller things including: * Increased political uncertainty in Europe after separatist parties came out on top in Spain’s Catalan regional elections, highlighting unhappiness among voters heading into federal elections in Spain and Portugal later this year. * Follow-through increases in political uncertainty in the US with the risk of a government shutdown growing as House Speaker Boehner plans to retire at the end of October with key budget, debt limit and other business related votes due through the transition. * Press reports suggest analysts have been cutting their Q3 earnings estimates for S&P 500 companies. * Press reports suggest Saudi Arabia sovereign wealth funds have been taking funds back from overseas wealth management accounts to the tune of $50-70 billion over the last six months to fund government operations so the country can wage its price war against the US. * Press reports suggest the IMF could be preparing to cut its global GDP growth forecast again next month. Stock market reaction has continued the recent trend of declining on weak news, seeing it as a sign of weakness rather than as a sign that more liquidity could be on the way. US indices stabilized a bit after New York Fed President Dudley indicated yesterday that he still expects the Fed to raise interest rates this year and that October is a live meeting, although he kept the usual data dependent escape hatch open. While close to the party line, Dudley had been leaning more dovishly in recent months, so the street could take this news as another hawkish swing. In currency markets yesterday, USD climbed again on anticipation of a Fed hike, while JPY and GBP also remained near the top of the league with the UK also trending amidst speculation of more stimulus out of Japan fading. Resource currencies dominated the lower half of the standings with NZD, SEK NOK and AUD weakening. CAD has been outperforming its resource currency peers by a wide margin, benefiting from its close association with the US and the unlikelihood that the Bank of Canada will cut interest rates before December at least due to the Canadian election campaign and rebalancing economy.



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