Risk Averse Sentiment Drives Global Equities Lower Due to Mix of Negative Data - 6.6.2013

Markets were shadowed by a risk averse growing sentiment yesterday as US equities closed in negative ground and then were followed by Asian stocks. Negative economic data weighted on investor’s psychology leading to more selling pressure. ADP Non-Farm employment increased by 135K in May disappointing expectations of 171K. In addition Factory orders increased less than projected in April while the ISM Non-Manufacturing was slightly higher than estimated, at 53.7 from 53.4, however was unable to reverse sentiment. S&P 500 declined by 1.38% to close at 1608.90, Dow Jones Industrial Average decreased by 1.43% or lost 216 points and NASDAQ closed lower by 1.27%. Speculation the FED may withdraw partly from its asset purchases added to selling pressure on equities. In contrast to that the US dollar index remained above yesterday's support at 82.39.

Following US equities, Asian stocks also closed at a lower ground with NIKKEI 225 continuing its fall for a second consecutive day to reach a new low since April 8th at 12904. The USDJPY maintains its ground for the time being above support at 98.85. The Aussie against the greenback slumped to more than 1 ½ year low at 0.9432 as unexpected negative trade balance indicates Aussie exports weakening, mainly due to China’s economic slowdown. The common currency has managed as of writing to climb above resistance at 1.3105 against the US dollar, currently is trading at 1.3119.

Investors are focusing today on BOE and ECB monetary decisions and statements, with no changes expected. Later on US Unemployment Claims are forecasted to be at 345K for the previous week, lower than two weeks ago and all that in the shadow of tomorrow's big event, the Non-Farm Payrolls.