Here’s the morning market update from Greg McKenna at GlobalFX.
– Fed mouthpiece Jon Hilsenrath was up to his old market moving tricks last night writing in the Wall Street Journal that the Fed will be very dovish at next week’s meeting as it keeps the bond buying program in place but works on ways to articulate its desire to keep rates low for as long as possible.
– This fits nicely with the relative economic outcomes between the US and Germany over night and the result was that the USD got hit hard again. The Euro (1.3274), Sterling (1.5385), Yen (99.26) and Aussie (0.9242 +100 from the lows 12 hours ago) are all stronger as a result.
– The NZD is also doing well after the RBNZ was a little on the hawkish side yesterday in the statement after their Board meeting and the Kiwi sits at 0.8061 against the USD and at 1.1446 against the Aussie – go figure!
– Stocks in the US were down early in choppy consolidative trade but “The Hilsenrath impact” drove them back higher. At the close the Dow was up 0.09%, The S&P 500 rose 0.24% and the Nasdaq rose 0.74% with Facebook’s massive 25+% surge on the back of yesterday’s results helping this index outperform. In Europe the impact of weaker price action in Asia, a warning from BASF and a poor performance of resources in London on the back of fears about Chinese growth, apparently, saw stocks close lower. The DAX was 0.96% lower, the FTSE fell 0.49%, the CAC only fell 0.17% and Spain managed to rally 1.09%
– It might not be such a great day on the ASX given the carnage in resource stocks in London but then again Asia might recover as the US did so it might be volatile.
– On bond markets the stronger IFO and improved Spanish unemployment didn’t help German bonds which were higher again up 1.85% to a yield of 1.68%. US rates were a little better bid with the 10′s falling to 2.58% after trading a little above 2.6% at one point.
– On commodity markets oil was higher in choppy trade closing at $105.61 Bbl, gold rose as the US dollar fell and sits at $1337 oz., Dr copper was unchanged and our friends Corn and Soybeans were smashed again down 2.6% and 2.9% respectively.
Data to end the week is fairly quiet with Japanese CPI, Singapore IP, German Import price index and French Consumer Confidence. So they may not be much to change the price action of the markets from last night.
Chop, chop, chop it’s been a week of back and forth.
More at GlobalFX. Greg’s on Twitter.
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