Here’s your morning market update, including some lows for gold and the Aussie:
– More positive news on Syria reducing the chances of a strike on Syria to almost zero (at the moment) as the Assad regime moves toward compliance with the global chemical weapons bans. But the only impact this appears to have market-wise is that gold has crashed $41 or 3% to $1322 as fear washed out of the market and important technical levels were breached.
– The other key theme running through the markets appears to be an expectation that the Fed will taper next week after the FOMC meeting, but that the taper will be small – $10 billion – and cautious and come with solid guidance on lower rates for longer. This helped US 10-year treasuries rally back to 2.92%, UK Gilts fell 6 basis points to 2.77% and in Germany, Bunds fell 5 basis points to 1.95% as European industrial production disappointed with a fall of 1.5% in July against expectations of a 0.1% rise.
– This weak European data knocked the Euro against the Yen and the pound, the latter of which is at almost 8-month lows, but against the USD the Euro at 1.3297, is only off marginally. In other FX markets, the Australian Dollar was the big loser, dropping from a high of 0.9353 just before the Employment data (-10,800 versus +10,000 expected) to a low of 0.9225. It sits at 0.9270 at the moment.
– On the US stock market, the focus does seem to have turned to the FOMC meeting and the run of rallies has ended. Jobless claims overnight was much stronger than expected at 292,000, down 30,000 from the previous week, but some processing problems have lessened the impact of any big uplift due to expectations of a tough taper. At the close, the Dow fell 26 points to 15,301, the Nasdaq fell 0.24% and the S&P 500 was 6 points lower at 1693. In Europe, the FTSE eked out a 0.01% gain, but the DAX, CAC and FTSE MIB were all down.
– On the Sydney futures exchange, the SPIS200 contract is down 12 points. Small losses were also recorded on the 90-day bank bill, 3-year and 10-year bond contracts.
– On Commodity markets, as noted, gold tanked but oil was a bit higher, rising 1.07% to $108.71. Silver fell 4.42%, Copper dropped 1.42% to $3.21 lb and the Ags moved around again with Soybeans up 2.62%, Wheat a little more than 1% and Corn falling 1%.
– On the data front, we’ve got NZ Business PMI and ANZ NZ Business confidence coming, unemployment and retail sales in Singapore, IP in Japan, EU employment and trade and then US PPI, retail sales and business inventories.
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