Waves Recede On Monday

August went by as quickly as it came. The Japanese Yen was a broad winner against high-yield currencies such as NZD, GBP, CAD, AUD, EUR and USD. In August, all the major yen-crosses fell as investors lost appetite in carry trades and stock markets wobbled. It has been a hair-rising ride in forex, stock and bond markets. The Dow slipped 0.2% last week
but ended August ahead 1.1% (it is now up 7.2% this year).

S&P500 was down 0.4% on the week but up 1.3% in August.

Think September will be a smoother month? Two words will swirl around in the September air, especially for the first 2 weeks leading up to the Fed FOMC meeting on September 18.

Volatility and Risk.

The level of volatility and risk will remain on the high side due to lingering uncertainty over whether or not the Fed will cut the benchmark rate before or during the Sept 18 meeting.

Last Friday's highly anticipated speech by Bernanke didn't make things easier for investors and players. There are still question marks.

According to research firm Thomson Financial, September has traditionally been a down month for US stocks. Over the last 20 years, the Dow has fallen an average of 1.3% in September - the worst performance of any month. The last three Septembers, however, all produced gains, topped by last year's 2.5% gain for the month.

This coming week has a full data release calendar, with the most important indicators being August's NFP (seen up 120,000 and jobless rate at 4.6%) and ISM manufacturing. Several central banks will also announce their rate decisions.

Americans and Canadians get a day off on Monday for Labour Day.