Dizzying Week Ahead: Bailout Deal To Be Finalized Soon And US Jobs Report On Friday

Last week’s continuous stream of financial news and events updates created such a busy week for many traders and investors even though many chose to sit out and watch the crazy antics taking place in the arena - a decision that may have slowed down the annoying pounding high heart rate. Bailout or no bailout? Which bank is being bought over by who? Washington Mutual (WM), the largest savings and loan in the US, was ordered by the government to shut down, and JP Morgan (JPM) swooped in quickly to buy over most of its assets at fire sale prices. When the bailout plan gets signed and hundreds of billions get funneled away into the black hole, uncertainty is likely to ease (although a little of it may still linger around till the US elections in November), and we might see a sharp rally in stock markets and a rally as well in high-yielding currencies against the Japanese yen in the forex markets.

A heavy slate of US economic data awaits this week, with emphasis on US ISM manufacturing on Wednesday and US non-farm payrolls on Friday. A cut of 105,000 jobs is expected and an unchanged unemployment rate of 6.1%. The short-selling ban imposed by the SEC in the US is due to expire this coming Thursday October 2, but it is likely to be extended for another 30 days.

Till the bailout deal is done, both the currency and stock markets will lack conviction in either direction. To keep your capital safe, make only fast trades or stay out of the market.

Economic Calendar For Sunday:

New Zealand trade balance 2145 GMT

Economic Calendar For Monday:

UK mortgage approvals 0830 GMT

Eurozone consumer confidence 0900 GMT

US PCE deflator, PCE core 1230 GMT

UK GfK consumer confidence 2301 GMT

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