Global Equity Markets Falling Sharply Again

On June 24, 2013 by TradingDesk

Global equity markets are falling sharply again this morning, as the Chinese central bank held back on any further easing – suggesting the novel concept that large banks should be in charge of liquidity – which combined with their recent slowdown in manufacturing has doesn’t bode well for the country that accounted for one third of global growth last year. This is the 2nd hint in a week by a major central bank that the days of easy and cheap liquidity injections may be coming to an end. If the market reaction is anywhere near as severe as it was to last week’s FED discussion, more selling may be coming soon.

Energy prices are mixed in the face of the wide-spread selling in stocks, with ULSD managing slight gains, WTI flat and RBOB just fractionally lower. The drop in the back half of the week has pushed technical studies into a bearish stance, with a test of the lower end of our trading range appearing likely. The Commitment of Traders report showed that speculative money, as of Tuesday night, added to long bets in WTI and RBOB, and cut their net-short positions in ULSD, just in time for the real selling to begin. If they reverse course this week, that could easily add to the bearish sentiment. $2.70 remains the major pivot point for refined products.

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