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Oil Market Drops $4 In Minutes and Apple Trades at $700

During the US trading session on Monday, there was a sudden drop in a matter of minutes of just over $4 in WTI and Brent. This sudden movement led to a selloff in equities, gold and silver. Speculation and rumours as to the reasoning were that there had been a “fat finger,” an algorithm that had gone wrong and that there was an announcement of a special petroleum release (SPR).  The CME Group quickly released a statement that they “..we’re not aware of any technical issues at this time.”  October options were about to expire, however the aggressive nature of the selloff led to speculation that move had been exaggerated. Such events are rare in nature, though it is a good example of the reasoning behind trading with stops and limits to manage your risk and market exposure.

The Apple records continue to be broken as the iPhone 5 sales shattered previous levels. It was announced that first-day orders had topped 2 million units more than double the previous company record. Analysts believe that the profit margin per unit is around $400 minus delivery costs. Apple shares surpassed the $700 level in late trading.

Headlines

The RBA said that it has room to cut interest rates to support the economy in face of falling commodity prices, high Aussie and weak global demand – Sydney Morning Herald

Angela Merkel said her "heart bleeds" for Greeks facing hardship during the Eurozone crisis as the German chancellor stressed that she was trying to help Europe, not anger people – The Daily Telegraph

The BOJ concludes a two-day policy meeting on Wednesday and talk that it could deliver monetary easing of its own has grown sharply in the face of a strong yen, which threatens to derail a recovery in the Japanese economy – CNBC.com

China house prices decreased 1.4% YoY in August

*Data out today; Inflation data from the UK, German ZEW and US current account balance and NAHB house market index*

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