Today I went fishing. Once again, Wednesday was quiet during the 9 - 12 session except for GBP which gave a decent signal. The 45 pips or so that you could have made, would have been frittered away on poor signals from the other pairs that lacked momentum and direction.Last night the Dow (US) was off 5% and the Nikkei (JAP) followed through with a 6.9% drop after US CPI (a measure of inflation) saw the biggest drop in 61 years. The good news was that fuel costs had fallen but the bad news was that US retailers are slashing their prices in a desperate bid to lure customers. The Dow fell below 8000 which was the lowest the Dow has been in 5 years. Or to put it another way, the last 5 years of gains have been wiped off the Dow.
So the US has now to deal with an ailing property market, an ailing financial sector, an auto sector looking for a handout and now ... deflation? When the US economy sneezes, the rest of the World gets a cold.
