Risk Appetite

I begin to sense kind of decline in risk appetite as investor sentiment ran dry. The reduction in positive price action can be due to several reasons, but much of the broad headlines are on news out of China, Greece and the Gulf of Mexico.
Forcing unwanted pressure on capital markets, China has once again been a catalyst for traders to largely take profits as it continues to take measures in an attempt to cool its booming economy. April PMI slipped to a reading of 55.4, compared to a March appraisal of a 57 – just enough among other to keep traders to lose faith and flee their positions. This one add to evidence that plenty of uncertainty persists through the global market place.

Weighing equally hard on equities and natural resources alike is the April 20 oil rig explosion that pumped at least 5,000 barrels a day of crude oil into the Gulf has been a disaster in countless ways. According to newswires, a concentrated efforts to mop up over the 200,000 gallons spilled on a daily basis since then could cost BP more than $12 billion.

Moving inline with the reduction in risk appetite, currency traders have favoured the safe USD at the expense of other majors such as the EUR and CAD. The eurozone currency has fallen through 1.31 for the first time since April last year as debt crisis in Greece has odds to multiply and stretch to peripheral countries like Spain and Portugal.