Energy

The Dow fell 148 points last night as bullish faith in the American consumer took a hit and S&P and Moody’s began moving in on the sub-prime mortgage market.

UBS economists have taken a sample set of the figures that will make up the second quarter CPI, and it doesn’t look that promising.

US employment data released on Friday was taken as a positive by Wall Street. This week sees local data released which should have a bearing on the RBA’s August rate decision.

It was happening all over the world last night.

Strong economic data overnight put paid to interest rate rise fears allowing the Dow to rally but causing the US dollar to fall. The Aussie is now testing US$0.86.

Soaring food prices in China have caused the authorities to act. Chinese inflation could have significant implications for the global economy.

Rate decisions are made by the RBA, BOE and ECB this week while the US anticipates employment numbers following a very volatile Friday night session.

The Fed moderated its inflation language while leaving rates unchanged last night, but a 71 point rally in the Dow failed in the end.

The Dow pulled back from the brink to pose a 90 point rally last night driven mostly by M&A activity.

Again the Dow attempted to post a 100 point rally and again it failed. Precious metals, base metals and oil were all trashed overnight.