Weekly US Jobless Claims out at the highest level since February, a development that suggests rising risk of a real double-dip in the US economy. Will risk trades tank further from here?
The market attempted to right itself overnight after the post-NY close Cisco Systems news saw the market punctuating the day with an additional swoon in risk selling, but the effort largely failed ahead of the open for trading today, and the pre-open data failed to raise spirits, as the weekly initial jobless claims number jumped to the highest level since and moving averages for the weekly data are clearly now heading in the wrong direction after the last two weeks of elevated number. The only straw optimists can grasp at is that this is a a seasonal low-point for jobless claims (all the way through mid to late September if we look at the historical record) and that we can hope that the acceleration in claims in the fall to January period will be milder than the past considering that unemployment is already so high. It's a tough grind for the optimist these days, to say the least. The market reaction to the number suggests that we have reverted back to the old pattern of ugly US data not necessarily triggering USD weakness as the general risk appetite implications .
