Here’s the morning market update, with all eyes on the dollar.
– We have to lead off with the Aussie Dollar, which is going from strength over the past two days and sits at 0.9170 this morning, around 1.4 cents higher than yesterday’s low just before the GDP. Of course it’s relative strength, but as the global economy heals, so expectations about Australia and the Aussie Dollar are healing too. The Loonie is stronger as well, suggesting this global growth story is gaining traction.
– In other FX markets, the Euro (1.3209) clawed back a bit of ground against the US Dollar. GBP (1.5626) is going from strength to strength as well, with its data flow printing really strongly lately with services PMI up above 60 now.
– Stocks took the announcement of a limited strike on Syria in their stride, with the Dow up 0.65%, Nasdaq 1.01% higher and the S&P 500 back above 1650 with a gain of 0.81%.
– Europe did OK as a result and the US strength dragged them out of a steep decline with the DAX rallying from 8096 to close 100 points higher in the last couple of hours of trade. The FTSE was up 0.10%, the CAC 0.15% and Spain’s IBEX +0.53%, but Milanese stocks fell 1.35%.
– In Australia today the ASX should open firm but it hasn’t been able to kick on this week, so it looks like more range trading below 5200.
– US 10’s are back at 2.90% which the Fed won’t like, Bunds are at 1.94% and Gilts sit at 2.70%.
– On commodities, Gold actually fell as the clinical nature of the strike becomes apparent, but this is very strange price action. It is down 1.42% to $1393 oz with Crude also falling 1.09%.
– Copper is at $3.24 lb, down 1.68%, and Soybeans dropped back from recent strength with a fall of 2.61%.
– On other data, the Fed’s Beige Book said that the US economy grew at a modest pace in August led by consumer spending, which has to be good news for the economy moving forward, particularly given the demand for housing related goods.
– Today we have a big data flow day with Japanese GDP (huge) and the Australian trade balance instructive. Then, of course, we’ll have the BoJ decision. Factory orders in Germany, BoE interest rate decision, ECB interest rate decision and presser. In the US, it is the ADP jobs data and jobless claims as well as labour cost and productivity data.
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