GM Concerns Send Global Stocks Tumbling

U.S. Dollar Trading (USD) gained for the third day as news broke that GM and Chrysler survival plans were rejected by the US Government and both edged closer to bankruptcy. Gains were broad based with the exception of the Yen which outpaced the dollar. Crude Oil closed down $3.97 ending the New York session at $48.41 per barrel. In US share markets, the Nasdaq was down 43 points or -2.81% whilst the Dow Jones down -254 points or -3.27%. Looking ahead, PMI Services (Mar) forecast at 34.5 vs. 34.2 previously. Also released, Case Shiller 20 HPI for January forecast at -2% vs. -2.5% previously.

The Euro (EUR) continued the selling seen on Friday with EUR/JPY selling accelerating losses on the GM news. European Consumer Confidence (March) fell to -33 vs. -34 and may add pressure to the ECB on Thursday. Eurozone PMI improved slightly to 44.1 vs. 42.3 previously. Overall the EUR/USD traded with a low of 1.3115 and a high of 1.3279 before closing the day at 1.3205. Looking ahead, German Unemployment Rate (March) forecast at 8.0% vs. 7.9% previously. March Inflation data also released forecast 0.8% vs. 1.2% Y/Y.

The Japanese Yen (JPY) was the major mover during the day with all crosses slumping on risk aversion after equity markets reacted to US auto news. EUR/JPY slipped to 126 vs. 130 and USD/JPY tested 96. Preliminary Industrial Production came in at -9.4% vs. -9.1% forecast. Also released March PMI Manufacturing which jumped to 33.8 vs. 31.6 previously. Overall the USDJPY traded with a low of 95.98 and a high of 98.31 before closing the day around 97.40 in the New York session. Looking ahead, Housing Starts (Feb) forecast at -17.7% vs. -18.7% previously.

The Sterling (GBP) was dragged lower by the Euro although held up rather well with EUR/GPB slipping below 0.93. UK data showed signs of stabilization with Mortgage Approvals jumping to 38k vs. 32k previously. Overall the GBP/USD traded with a low of 1.4114 and a high of 1.4294 before closing the day at 1.4250 in the New York session.

The Australian Dollar (AUD) tracked stocks lower falling over 2% on the back of the spike in risk aversion and the break of the 0.6840 support level. Also weighing was the 7% pull back in Oil and fall in Gold. AUD/JPY led the way down although did manage to recover somewhat in the US session. Overall the AUD/USD traded with a low of 0.6773 and a high of 0.6922 before closing the US session at 0.6800.

Gold (XAU) had some volatile movements although ended lower as safe haven buying was outpaced by large falls in Oil. Overall trading with a low of USD$909 and high of USD$932 before ending the New York session at USD$917 an ounce.

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