Farewell to a Rotten August- US Update

So ends the worst August for US equities since 2001, with the Dow off 4% and the S&P down close to 5%. Now everyone returns from holiday, rolls up their sleeves and volume will begin to increase back to normal levels- at least one hopes so( no sign of it so far this morning, sadly). Now we find out what the majority think, rather than having markets moved by a few on very low volumes.
So what are the odds? Few things to make one believe optimism will rule the early days- although that could be changed by pleasant surprises in the home sales and employment numbers later this week. Nevertheless, European markets have managed 1.5% gains this morning... I would be lying if I said I understood why. Even charts show the Dow heading towards 9600, unless it can break resistance at 10200 in the next sessions.
Caution the watchword to start the month then, until that US data gives us a push one way or another. Today we do get ISM manufacturing data from the US - PMI manufacturing from the UK came in lower than expected..
Talking of market volumes- the BIS have announced figures showing that the DAILY turnover in global FX markets has reached a level where it more or less equals the ANNUAL economic activity of Germany. Am I alone in finding that slightly scary? Or is the fact that daily activity in over the counter derivative markets is still growing and now stands at over $2 trillion even scarier?
Main new issue activity last night was the $4 billion 10year deal from KFW. This morning Lloyds are bringing a 5yr unsecured deal circa Euribor +200.CDX was more or less unchanged yesterday and VIX just a fraction tighter as the month meandered to a close.
The Fed sees more signs of economic slowdown and, no doubt, Mr Obama will continue to advocate a solution of throwing ever more money at the problem. Interesting that one of the strongest western economies at the moment seems to be Germany- who refused to spend uncontrollably even in the darkest hours of recent years. Food for thought... Happy Wednesday.