Message 3 - Fundamentals

The USD saw a significant rally on Friday following the University of Michigan Consumer Confidence data which was worse than forecast. The S&P 500 saw a 75point pullback and thus risk-sentiment and the safe haven status of the USD caused a significant rally on Friday afternoon.

This all happened after better than expected 2Q GDP figures for Germany and France which came in at 0.3% compared to a forecasted contraction of 0.2% and 0.3% respectively.However, the advance reading of the Euro-zone figure came in at a contracted figure of 0.1% - the same as the US.

There remains significant risk associated with other countries in the EU, specifically the eastern countries where a real risk of soveriegn default exists.

Tomorrow the only significant news is the US with the TIC Long Term Purchases figure.