Your morning market update features new all-time highs… again
– US non-farm payrolls undershot expectations last night with a print of 148,000 against an expectation of 180,000. Even though the unemployment rate fell to 7.2% from 7.3% last, this data looks weak still and as a result the taper is receding into 2014. As it recedes, stocks get a corresponding boost.
– So it was last night with the stocks off their highs, but the S&P 500 still closed up another 10 points or 0.59% to 1755. The Nasdaq was 0.25% higher and the Dow rose 0.49% to 15,468. Targets of 1800-plus remain in place around the market.
– In Europe, the rally started early and then accelerated after the release of non-farms. Like the US, European stocks pulled back a little from the high, but at the close the FTSE was still 0.63% higher, the DAX rose 0.90%, the CAC was 0.42% higher and stocks in Milan rose 0.57%. Can’t seem to find the catalyst for the fall in Spanish stocks, but the IBEX was down 0.25%.
– On the Sydney Futures Exchange, the SPI200 roared higher once again, up 31 points to 5387 bid. The 3- and 10-year bond contracts rose as well, up 7 points each on the back of the rally in US and global interest rate markets after the miss in non-farms. US 10’s closed down 9 points at 2.52%, Bunds finished at 1.80% and Gilts are at 2.48%.
– On Forex markets, the USD was under intense pressure and fell, in index terms, to 79.23 – its lowest level since February. Euro (1.3779, +0.72%) looks on its way to 1.40 and GBP (1.6229) looks equally strong. USDJPY (98.13) is not much changed but the USD lost 0.77% against the Swiss franc, which sits at 0.8950 this morning.
– The Aussie dollar likewise is well bid at 0.9708 and not far now from the original technical target of 0.9760/70. It is up 0.57% on the day and well off the low of 0.9640 yesterday. The support just continues to grow for the Aussie and while a pullback at some stage is inevitable, the preconditions for further strength in the months ahead are growing.
– On Commodity markets, the welcome fall in Nymex crude continues and it is now gone and heading a good way lower, according to the technicans. Gold was up 2%, or roughly $27 to $1341 oz, while Silver was up 2.34% to $22.48 oz. This move in precious metals is largely a USD move. The Chinese are doing the right thing, hedging Treasuries by soaking up Gold. Copper rose to $3.33 lb also on the back of the USD while in the Ags, Corn fell 1.46%, Wheat rose 0.14% and Soybeans fell 0.29%.
On the data front today we get CPI for Australia, with the market expecting a rate below 2% year on year. Tonight in the UK we get the BoE MPC vote, the BoC vote and US trade data, which will be very interesting.