From Greg McKenna of GlobalFX and Lighthouse Securities, here’s a quick guide to what traders are talking about in the Australian market this morning.
– The scene in global markets overnight was set by the flow of data. HSBC and Markit Manufacturing PMI’s over the past 24 hours dominated. First China (47.7) printed its lowest number in 11 months which knocked the Aussie dollar as we rolled through Europe better prints in France (49.8), Germany (50.3) and the EU (50.1) were all higher than expectations and up on the previous month. Also out were solid New home sales data in the US which jumped 8.3%.
– As a result the US dollar is stronger this morning (increased taper hopes) across the board but off its highs on the back of the data. EUR (1.3194) was the most resilient given the better data in the EZ but GBP (1.5307) was 0.4% lower, the Yen (100.27) lost 0.87%.
– But it was the Aussie dollar weighted down by the accommodative CPI (0.4% qoq, 2.4% yoy) and the weak Chinese PMI which was hammered lower from a high of 0.9317 to a 0.9128 low and sits at 0.9156 this morning. We’ll discuss below.
– The datafest hammered bonds in the US, the UK and Germany with 10 year Treasuries (+8 bps @2.59%), Gilts (+9 bps @2.40%) and Bunds (+10 bps @1.65%). Ouch that is a 3% loss in the US 10’s, 4% in the UK and a whopping 6.22% loss in Germany for bund investors.
– Stocks were also under pressure from the better data (oxymoron alert) as bond yields rose but also as Caterpillar and AT&T disappointed. At the close the Dow (-0.17%) and S&P500 (-0.38%) were lower and the Nasdaq just dragged itself into positive territory (+0.02%) even though AAPL was 5% higher. In Europe the better data, which was unexpected pushed stocks higher across the board with FTSE (+0.34%), DAX (+0.78%) and CAC (1.02%) all higher. Worth noting, Facebook has destroyed estimates after the bell.
– In Australia the ASX is signalling a small positive open this morning – hopes of rate cuts and resources likely to dominate again.
– On Commodity markets Gold has given back some of its gains (-$13 or 0.99% @1322 oz.) under the weight of better USD and Crude fell 1.79% ($105.31 Bbl.) even though another almost 3 million barrels were drawn. Corn and Soybeans continued their selloff dropping 2.78% and 4.62% respectively.
Data today is vitally important for global and individual markets. In New Zealand we get the RBNZ rate decision before Japanese investment data, Italian consumer confidence, and crucial German IFO and UK GDP before almost as crucial US Durable Goods and Jobless Claims and the Kansas Fed index.
More at GlobalFX.
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