Here’s the morning market update from Greg McKenna at GlobalFX.
– The US has made its case for the attack on Syria plain, but rather than act unilaterally, President Obama has decided to take the strike to Congress to get its backing before acting. In this way he continues to circumvent the UN but is looking to lock in US lawmakers at least. Worth noting Obama is in Russia later this week, so don’t expect the attack too soon.
– A wobbly and slightly volatile day on Stock markets as US Secretary of State Kerry made the case and laid out the evidence for the strike. The S&P 500 opened at 1640 and dropped to 1628 before bouncing between 1628 and 1633 where it closed with a loss of 0.32%. The Dow lost 0.21% and Nasdaq fell 0.84%.
– Europe had a much darker day with losses of more than 1% across the big 5 exchanges. The FTSE fell 1.08%, the DAX 1.12%, CAC 1.31%, Milan dropped 1.32% and Madrid was 1.67% lower.
– On Rates markets, US 10’s rose to 2.79%, Bunds closed at 1.85% and Gilts finished at 2.59%.
– On FX markets the Aussie was under pressure falling back below 88 cents but Reuters is saying it is up at 0.8936 this morning which is interesting and likely a result of the stronger Chinese data released over the weekend with NBS Manufacturing PMI rising to 51 against 50.6 expected. Euro is at 1.3220, GBP 1.5534 and USDJPY is at 98.38 this morning. A huge week of Central bank announcements in Australia, Japan, UK and Europe and then non-farm payrolls to round out the week so it could be a big one for FX.
– On Commodity markets, gold slipped back through $1400 to $1393 for a fall of 1.19%. Silver fell 2.60% and Nymex Crude dropped 1.06%. Dr Copper fell heavily across the week and is now back at $3.23 lb. For the first time in ages all three Ag commodities – Corn, Wheat and Soybeans – moved less than half a per cent each.
– On the data front, we kick off a busy week with Terms of Trade in New Zealand before Korean CPI, AiG performance of Manufacturing in Australia along with TD monthly inflation data, building permits and Company gross operating profits in Australia. HSBC manufacturing PMI in China and then the round of Markit manufacturing PMI’s across Europe and the globe.
– It’s also Labour Day in the US so it might be a quiet night after the data releases.
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