Market Volatility In U.S. And Asia, Key BOE And ECB Meetings Later

More bad news out of the U.S. yesterday with Asian stocks taking a hit. Weak factory and employment data came well below investor estimates, while fears persist that the Fed will pull its monthly $85 billion asset buying program.

The ADP private payroll survey data showed that private employers added 135,000 new jobs over the month of April. Expectations had been for a rise of 167,000 jobs. Added jobs numbers for May will be released on Friday.

The ISM (Institute for Supply Management) releases their figures for May services index, showing that their reading had risen to 53.7 from 53.1 the previous month. While this is a positive gain and beyond the crucial 50 mark, it still came below estimates of 54.

Stocks
Asian stocks did not react well to all the disappointing data or the weak comments made by Japan's PM Abe., as many of the indices were close to 4 month lows. The Nikkei 225 went 0.82 percent lower, while the Hang Seng in Hong Kong lost 0.87 percent, and the Shanghai Composite was down 0.11 percent.

In Europe, stocks inched up ahead of the ECB and BOE’s statements due out later today. In today’s early European session, the EURO STOXX 50 was up 0.12 percent, the French CAC 40 gained 0.17 percent and the FTSE 100 was up 0.02 percent.

In the U.S., the stocks closed predictably lower with the DJIA down 1.43 per cent, the S&P 500 down 1.38 percent and the NASDA down 1.27 percent.

Forex
The U.S. rallied from its losing position against the other currencies following the release of the data, and was trading mostly up during the overnight Asian session. The AUD dropped drastically to almost 20 month lows against the dollar, shedding 0.91 per cent. This came on the release of the Australian trade balance which fell to AUD 300 million in May from AUD310 million the previous month. Investors had predicted a drop to AUD220 million.

The dollar made gains against the YEN, but dropped 0.7 percent against the EUR.

Commodities
Crude oil was the only commodity to move higher and rose by 0.34 percent on the data releases. Gold and silver were trading lower, 0.07 percent and 0.33 percent respectively.

Today
Lots of data releases today: the U.K. housing and BOE and ECB meetings then jobless numbers from the U.S. Today should be a volatile day for the markets - watch closely.