Is Roubini's Double-Dip in Focus?

There has been a spate of good Fundamental data releases today including:

German IFO beat its forecasted 89.0 by posting a rise of 90.5 from 87.3.

US Durable Goods July Orders increased by 4.9% from the decline June -2.5% easily beating the forecasted 3.0%

US New Homes Sales rocketed to 9.6% recording the largest increase since Feb 2005

Yet, despite these very strong figures together with yesterday strong US Consumer Confidence, the Dow Jones Index has only recorded a modest increase when usually it would have achieved much higher gains.

Similarly, the higher yielding currencies, EURO and GBP, should have risen significantly against the USD and the YEN. In contrast, however, the EUR/USD has dropped by over 130 pips from 1.4350 to 1.4220.

So what is happening?

Maybe that despite these bullish results, the market is worried that banks’ reluctance to lend will prevent a swift return of consumer spending to previous levels.

In addition, Nouriel Roubini double-dip theory may begin to take more prominence if traders fear that the scope of the global recovery is not sustainable.

There are major fundamental releases from Europe and the USD tomorrow and it will be interesting to see if this pattern continues.