Two Ways: Money Supply Contracts in Europe and US-Minyanville

Two Ways: Money Supply Contracts in Europe and US

Terry Woo Oct 28, 2009 8:05 am

Two Ways: Money Supply Contracts in Europe and US


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Deflation fears persist as credit in the US and Eurozone regions continue to contract. In a story by the Telegraph, data from the European Central Bank showed that the M3 broad money supply fell over the last six months with loans to the private sector falling 0.3% from a year earlier, the first decline since the data started in 1983. In the US, the M3 figures fell at an annual pace of 6.5% in the last quarter, a rate not seen since the Great Depression.

For more context, see Professor Kevin Depew’s Five Things: The Debt Crisis is not a Conspiracy.

From the Bull Pen: If deflation is the theme, consider the US dollar fund (UUP). Those playing it can set a trailing sell stop below $22.30.

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From the Bear Cave: Keep an eye on the Russell 2000 ETF (IWM). If your style is to short failed rallies, watch for a failed comeback near $62. Enter if and when, and remember to set a buy stop above that level.

A Quick Check Around the World

Asian trading closed with the Nikkei -1.35%, India -0.43%, Hang Seng -1.84%, Shanghai -2.83%, and Taiwan -1.61%.

Across the pond, we see the FTSE -1.77%, CAC -1.67%, DAX -1.64%

As of 7:50 a.m. EST, S&P Futures are trading -6.25 to 1054.25 and Nasdaq futures are -6.000 to 1714.00.

A Look at Commodities

Over in commodities, crude oil is -0.64 to 78.91 while gold is -3.00 to 1032.40 this morning. Silver is -0.63 to 16.435 and copper -4.000 to 295.90.

The dollar index is +0.1600 to 76.4400.

On the Radar

Economics

08:30 Durable Orders 0.7% cons.
08:30 Durable Orders ex Transportation 0.8% cons.
10:00 New Home Sales 440k cons.
10:30 Crude Inventories

Click here for the full trading radar.

Happy Hump Day! Good luck!

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