SNB disappointed
SNB announced on Wednesday that it will take further action to prevent the strengthening of the franc. The bank will use currency swaps and it will increase sight deposits to 200 billion francs. This announcement, however, has not won investors’ favor, because SNB refrained from setting a target rate for EURCHF currency pair.
SNB has been trying to actively fight with overvalued currency for two weeks. It lowered its interest rates and significantly increased market liquidity. Swiss government tries also to tackle the problem. Yesterday the government announced 2 billion franc support package for businesses affected by the currency (i.e. exporters, hotel industry).
Stocks down again
Lower than expected Dell’s revenues and downward revision of forecasts was the main source of yesterdays 0.47% decline in the Nasdaq Composite index. Dell shares went down by more than 10%. Investors were selling also another computer manufacturer, Hewlett-Packard Company. It closed day with a decline of 3.7%. Sentiment on Wall Street, the strong yen and concerns about the situation in the global economy, caused losses on the Tokyo Stock Exchange also.
After a few calm days, after the panic sell-off of during the first week of August, the mood on the stock markets starts to deteriorate again. If the macroeconomic data (from US economy and labor market) occur to be a negative surprise, the indexes may return very quickly to the vicinity of the August lows.
Events to watch
Thursday's calendar is full of important macroeconomic reports: the July retail sales data in the UK (forecast: 0.3% mom), CPI in USA (forecast: 0.2% mom), weekly jobless claims in USA (forecast: 400k), Philadelphia Fed index (forecast: 3.7 pts.), Conference Board Index (forecast: 0.2%), existing home sales in USA (forecast: 4,9 millions).
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Paweł Kordala |
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