Your morning market update, where life is good everywhere else.
– A better night on global stock markets with a move back into the green as fears about the taper seem to have abated. (Goldman Sachs put out a report saying it didn’t expect the FOMC to make the move this month.) EU and German Markit PMI’s printed higher than expected, well up on last month, while US industrial production rose 1.1%, a full 1% better than last month and way above the 0.4% expected by economists. It’s a story of global economic healing and while such data makes the taper more likely than not eventually, it also speaks of an improving underlying economic backdrop for companies to operate in. With US non-farm productivity up 3% in Q3 (wages fell 1.4%), profitability can remain strong.
– So at the close, US markets have drifted off a little from the day’s highs. The Dow is up 130 points or 0.82% to 15,885, the Nasdaq is 0.73% higher and the S&P 500 has risen 12 points to 1,787 for a gain of 0.66%.
– European Bourses were stronger across the day, rising steadily into the close. The EU data was solid, as was German PMI (54.2 v 53 expected) but French manufacturing PMI fell back again for a loss of 2 full points to 47.1. At the close, the FTSE was 1.27% higher, the DAX rose 1.75%, the CAC was lifted 1.49% by the rising tide with no heed to the disastrous PMI numbers. In Milan, stocks ripped 2.34% higher while in Madrid the IBEX was up 1.70%.
– On the ASX overnight, futures trade took its lead from offshore with the Dec contract up 33 points to 5134 while the March contract rose 35 points to 5101 bid.
– On FX markets the Aussie dollar is still languishing around 89.5 cents and could get a double whammy slam dunk today with the Government likely to paint the worst possible light on its finances and budget deficit with the release of the MYEFO. The RBA Board meeting minutes are likely to once again explicitly say that the Aussie is uncomfortably high. It will be an instructive day on whether there is any support around for the Aussie.
– In other markets, Euro rallied back toward the highs of last week, hitting 1.3798 but is off a little, sitting at 1.3754. Sterling is largely unchanged at 1.6310 while USDJPY is down a little after the Tankan hit a 6-year high yesterday but off the low of 102.62, resting at 103.01 this morning.
– On commodity markets, there is a sense that the evidence of recovery we are seeing might be real if you look at the Copper market. Copper is often said to be the commodity with a Phd because it is a good indicator of growth and at $3.37 lb, Dr Copper is up to something. Nymex crude is higher as well, up 0.99% to $97.56 Bbl and Gold has lifted 0.79% to $1245 oz. Corn is down 0.18%, Wheat lost 0.99% and Soybeans are up 0.90%. Bitcoin has had a mini-crash from above $900 last night to $790 this morning.
On the data front today, in Australia the dominant driver will be the MYEFO but watch out for the RBA minutes. Motor vehicle sales will be on the periphery but keep an eye on RBA assistant governor Guy Debelle’s speech and panel discussion at 11.15am.
Offshore, Chinese foreign direct investment is worth watching and then in the UK tonight a raft of CPI and PPI data with EU and US CPI data also out. The German ZEW survey is also important, as is the US NAHB housing market index.