Your morning market update is all a bit floppy.
– The Fed was the key driver overnight and depending on who you believe they are either still pumping in cash or they were more hawkish in this month’s statement than expected. My colleague, Matthew Boesler from BI US has it best, though highlighting the phrase that seems to have concerned markets: “Taking into account the extent of federal fiscal retrenchment over the past year, the Committee sees the improvement in economic activity and labour market conditions since it began its asset purchase program as consistent with growing underlying strength in the broader economy.”. This phrase implies that the Fed has looked through the recent Government shutdown and thinks growth is going okay.
– The other view of course is the Fed kept the bond-buying program and so the economy is too weak to taper, but at the close stocks were lower, so perhaps they also saw a little something to be concerned about. The Dow fell 0.39% and the Nasdaq fell 0.54% (Facebook’s results just released might help in night trade) and the S&P 500 fell 9 points or 0.51% to 1763. Technically, this looks like a top on the S&P 500 as it has run into the top of the uptrend channel from the 2009 lows.
– Across the Atlantic, early rallies on the back of Asia gave way and stocks basically drifted lower all day. At the close, the FTSE was up 0.05%, the DAX fell 0.13% and CAC dropped 0.10%, while in Milan and Madrid stocks fell 0.47% and 0.86% respectively.
– On the Sydney Futures Exchange, the SPI 200 contract fell 15 points to 5403 bid and will likely remain pressured given its technical outlook as well. On the bond screens, the 3-year fell 4 points and the 10’s were 5 points lower, reflecting the rise in US yields with the 10-year Treasury closing at 2.53%.
– On Forex markets, it was more quiet than stocks, however the US dollar regained ground from early weakness which saw the Aussie back at 0.9515 at one stage before drifting back to sit at 0.9471 this morning. Euro sits at 1.3726, Sterling 1.6029 but USDJPY saw the USD rise 0.45% to 98.61.
– On Commodity markets, Crude fell 1.46% to $96.74 Bbl, Gold fell out of bed a little yesterday morning and sits at $1342 oz but copper rose 5 cents to $3.32 lb. Wheat was 0.99% lower, Soybeans rallied 0.66% and Corn was 0.46% lower. Bitcoins are a little lower at $209 this morning.
On the data front, last night’s ADP survey in the US was disappointing at just 130,000 jobs and consumer prices remain low, which is clearly in contrast to the Fed comment as noted above.
Today in New Zealand we see business confidence and then private sector credit and building approvals in Australia before the BoJ announces its own decision on monetary policy. In Germany tonight we get the Gfk consumer confidence data along with retail sales and then CPI for the EU. In the US, we have US Treasury Secretary Lew speaking and the Chicago PMI.