Analysis: Market Outlook

The markets are still waiting for details on the US financial markets bailout program, as later today 13:30 GMT, Paulson, Bernanke and and Cox will address in a testimony on this issue, which the highlight may pose to be an event risk for the evening. By observation on the FX markets, the market seems to be anticipating a bearish trend underlying for the US Dollar, due to the loosening of monetary and fiscal policies of the US, which is usually seen as a problem for a currency. Currently, the USD is trading weaker against the majors.

Be reminded that central banks have injected massive amounts of money over the weeks, if the bailout scheme does not turn out to be as welcoming as expected, then we may have to keep a close watch on the USD and US equities markets for a roller coaster ride. The hope is that this bailout program could work to improve liquidity and provide banks the opportunity to liquify their balance sheets, but hope may not always come true.

On the maturing Oct crude oil contract, we witnessed a short squeeze on the maturing contract as prices spiked higher for some unusual reasons, as by logic, traders tend not want to get caught on the final day of trade for a commodity.

Nikkei is closed for holiday. Shanghai and Shenzhen managed to revive earlier losses, but it still closed negative. The death of toll of young children has increased, for the melamine mixture in one of China's dairy products producer, remain to creep in the news on most asian newswires.

Straits Times Index remained lower as investors remain careful to the Paulson, Bernanke and Cox's testimony.  

US equity markets will be opened mixed later. Bonds prices are also higher.