Fed in a lose/lose situation

The Day So Far

Yesterday we saw equity markets open lower again on the back of concerns over China's slowing economy before then trading in a sideways range throughout the duration of the day. In a trading environment very different to before the bank holiday range trading strategies in equity markets were certainly the ones to follow. Crude oil however was a very different story, we opened in WTI having traded higher by 25% in only 3 days, the larges 3 day rally for over 25 years.By the close of the session WTI was trading lower by nearly 10%. These intraday moves are quite phenomenal and whilst they provide significant opportunity to the intra-day trader it makes medium term projections almost impossible on the commodity.

The After noon View

This morning we have seen a reversal in risk appetite as once again Europe follows the lead set by Asia which stabilised somewhat overnight, After a positive start however the DAX now hugs its 10k handle.We would expect limited market volatility today until the headline data for he session, ADP employment at 13:15 BST.The employment data carries more weight than usual due to the corner the FED has created for itself regarding the first rate hike. Will it be September, will it be December, will it even be this year at all? Whatever the FED does now we think it is a lose/lose situation. If they do not hike it shows continued procrastination and delay, where now the market will see this as a sign of weakness. If they do hike then the markets are so sensitive a further move out of risk may be seen.