– The US dollar remains on the back foot assailed overnight by a huge drop in the Richmond Fed Manufacturing Index which fell from 8 last month to -11 this month against expectations of +7. The data in the US continues to disappoint undermining the USD and making my expectations of Septaper a little less strong.
– The Aussie (+0.48% @ 0.9289) and CAD (+0.43% @ 1.0286) were the big winners against the USD but the EUR (1.3221), GBP (1.5378) and JPY (99.46) were also stronger against the USD. Today’s editorial will look at the Aussie dollar in the context of the CPI today.
– Key driver of the Commodity bloc was the news from China, Xinhua via Bloomberg, that Premier Li Keqiang said that 7% is the bottom line for growth that China needs to achieve to achieve a moderately prosperous society by 2020.
– Stocks in the US were mixed with the Dow and S&P hitting both a fresh intraday highs before the Dow closed at a new all-time closing high of 15,568 (+0.14%) but the S&P (1692) and Nasdaq (3579) were lower by 0.21% and 0.59% respectively. Plenty of earnings overnight beat expectations as Apple has done after the bell but Du Pont and Travellers disappointed. In Europe it was another poor performance after early strength (China induced) for stocks with the FTSE, DAX and CAC all down following the direction of US stocks but Spain rose 1.36% after a positive debt auction.
– In Australia the ASX was becalmed in the past 24 hours really and will be driven by expectations about rate cuts after the CPI at 11.30 today.
– Bonds were slightly higher, but hardly material, across the Board with the US 10 year at 2.51%.
– On Commodities Gold’s break out continues and it sits at $1344 this morning, Copper caught a lift on both a weak US dollar and the Chinese growth comments, Corn and Soybeans got spanked down more than 3% each and Silver fell 1.23%.
Data out today is front an centre with the release of Kiwi trade balance, Japanese trade data (super important) and the Australian Q2 CPI (super super important for the AUD) before we get stuck into the next round of preliminary Markit and HSBC PMI’s for China, France, Germany, EU, Italy, UK and US – big data flow – and then new home sales and the Crude draw.
So it is a big 24 hours for markets
More at GlobalFX.
Greg McKenna is on Twitter here.
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