Here’s your morning market update, with good news on all fronts. Hopefully.
– The best news in ages for everyone involved in the Syrian Civil War – for the Americans and the Russians, for the international community, for the innocents in Syria and much less importantly the market – is that both Russian Foreign Minister Lavrov and UN Secretary General Ban Ki Moon have called for Syria to move their chemical weapons to a place so they can be destroyed. This is clearly an effort to prevent a US missile strike but also is good news for the US and Russia to take a step back from a potentially ugly confrontation.
– But markets seem to have reacted more to the Chinese and Japanese data yesterday and over the weekend, which showed both that China has come through its soft spot and Japanese growth seems to have genuinely turned a corner for now. The Shanghai Composite was up 3.41% and the Nikkei was 2.48%. The Australian market was only up 0.7% but the SPI 200 contract has rallied to 5200 in overnight trade.
– The positive tone out of Asia seemed to pass Europe over and land in the US, as the FTSE fell 0.25%, the DX was flat and the CAC fell 0.23%. The FTSEMIB soared 1.16% while Madrid was also down 0.25%. In the US, the Dow finished up more than 100 points for a gain of 0.94%, the Nasdaq rose 1.26% and the S&P 500 was 17 points higher at 1672 for a gain of 1.02%.
– Strangely though, US rates still rallied 3 points to 2.91% while rates in Germany and the UK rose a couple of points to 1.96% and 2.78% respectively. On the Sydney Futures exchange overnight, 10-year bond futures rose 1.5 basis points.
– ON FX markets, the Euro (1.3263) continued its recovery away from 1.31 last week, USDJPY is down slightly at 99.59 and GBP (1.5702) also benefited from a weaker US dollar. The Aussie (0.9230) is up less in percentage terms than the other majors but it really is climbing a wall of worry, so any gains will be hard-fought.
– On Commodities markets, the potential reduction in tensions saw Nymex crude fall 1.53% to a still elevated $108.84 Bbl, Gold hardly moved, Dr Copper was up half a per cent to $3.28 lb, while our friends the Ags just can’t help themselves, with Corn down 2.85%, Soybeans falling 2.28% and Wheat 0.98% lower. In other Commodity news, Frozen OJ dropped 3.08%.
– On the data front today we have Kiwi electronic credit card sales, BoJ Minutes and the most important data release in Australia, the NAB Business Survey. Chinese Industrial Production, retail sales and urban investment also make a showing. The release in India of the trade deficit will be interesting, then we see French industrial output, Italian GDP and BoE Credit and Inflation information. NFIB business optimism is out in the US.
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