From Greg McKenna of GlobalFX and Lighthouse Securities, here’s a quick run-down of what the market will be talking about this morning.
– Stocks were under pressure into week’s end with more Taper Talk. The Dow (-72, 0.47% @15,426) was down as much as 152 points at one stage before recovering a little with a similar pattern of trade for the Nasdaq (-0.25% @ 3660) and the S&P 500 (-6, 0.38% @ 1691). This marked the end to the six-week rally with a lower close on the week.
– Europe wasn’t swayed by the weak US performance though, with rises on all major markets. The FTSE closed up 0.82%, DAX 0.24%, CAC 0.31%, FTSEMIB 0.24% and IBEX35 was 0.74% higher.
– A bit of reality came back into Global FX markets on Friday, or at least it felt like it to me after a weird week, with the US dollar getting its mojo back in unwinding some of the baffling strength in euro ( 1.3337) and sterling (1.5502) early in the week. The Aussie kept keeping on, making a high around 0.9213 but it is off a little this morning. USDJPY continues to have a downside bias and closed the week around 96.21.
– On rates markets, there was a bit of a rally in US 10’s which closed at 2.58%, while Bunds closed at 1.69% and Gilts at 2.46%.
– It is also worth noting the moves in the Citibank Eco surprise index last week for G10, US, Eurozone and China, all of which improved materially (data better than expectations), while in Australia the data was weaker than expected, knocking the surprise index into negative territory for the first time since March.
– On commodity markets, copper was on a tear into week’s end, closing at $3.31 lb, up 1.16% and more than 8% better than the lows a month or two back. Crude was up a stunning 2.49% to $106.03. Silver was up 3.52% but gold was fairly flat at $1314 oz. The Ags had another day of decent moves with corn, wheat and soybeans all down more than 1%.
– Oh, and of course in Australia we had a leaders’ debate in the run-up to the election which seems to have put the idea that the Labor Government has a real chance of victory back in its rightful low probability place. PM Rudd was nowhere near as strong as expected and Opposition Leader Abbot was nowhere near as poor as many hoped. The honeymoon seems to already be over for Rudd as his Back-to-the-Future Peter Beattie move last week had already suggested. Will markets care? Nope! But small business might be happier about a clearer picture of who might be the victor.
– On the data front, Korean export and import price growth is out along with Kiwi food prices, before huge data from Japan in the form of GDP, which is expected to moderate from the 4.1% annualised rate last quarter but print a still healthy 3.6% rate. We also have Singapore’s GDP out which will be an interesting lead on what is going on in the region before we head to Europe and the US for some minor releases such as French current account, Portuguese CPI and the monthly budget in the US.