– US markets were closed overnight so most of the action was centred in Tokyo and London. The Nikkei recovered from early weakness on the back of the big miss on Japanese GDP, which printed 0.3% qoq versus 0.7% and saw the annualised rate drop from 2.8% to just 1%.
– In London, the FTSE rallied 1.09% on the back of BoE Governor Mark Carney’s soothing words. Carney noted that he wanted to give “comfort” that rates aren’t going to rise until the economy gets back on a sustainable footing, including employment increases and spending.
– On the Continent however, the DAX fell 0.06%, the CAC lost 0.12% while the IBEX 35 in Madrid lost 14%. In Italy, the bond rally continued and the FTSEMIB rose 0.12% after the mayor of Florence Matteo Renzi was asked to form a government by the Italian President. Interestingly, in Germany, the Bundesbank warned on German housing, saying that prices could be as much as 25% overvalued but then added things were all good – so it’s okay, move along, nothing to see here.
– Elsewhere, regulatory fillings last week have revealed that the newly crowned king of the hedge fund world (or perhaps recrowned), George Soros, has doubled down (actually almost tripled down) on his bearish bet on the S&P 500 to a position of $1.3 billion short.
– Locally the SPI 200 March contract on the ASX Futures overnight continued to rally, up 28 points to 5371 bid.
– On global FX markets, sterling came under pressure from the Carney comments (nosebleed levels, technically) and some concern about tonight’s inflation data which is widely expected to show another print below 2%. At 1.6705 GBP is only down 0.23% on the day but it is almost 120 points off the 1.6822 high. Elsewhere, euro is up a little at 1.3705, as is USDJPY which rose 0.13% to 101.93 but well off the low of 101.37 after the Japanese GDP data yesterday.
– The Aussie dollar is also lower, sitting at 0.9030, down 0.24%. It’s a big day for the Aussie today with the release of the minutes at 11.30am. As Annette Beacher from TD Securities noted in our earlier piece this morning, it is unlikely the Aussie will do nothing over the next 24 hours.
– On commodity markets, Gold rocketed another $10 an ounce in the past 24 hours and sits at $1339.66 this morning at a fairly important technical juncture. Nymex Crude is up 0.62% to $100.92 Bbl and Copper is up another 2 cents at $3.34. Corn’s rally continued, gaining another 1.08%, Wheat rose 0.5% and Soybeans dropped 0.5%.
– Bitcoin’s, or should we say Mt Gox’s, troubles continued in the past 24 hours with prices on the Japanese exchange tanking to $220 at one point. Mt Gox is in decline and prices on other exchanges are above $600.
On the data front, RBA minutes is the key data release domestically. In Japan, the BoJ has a policy meeting and then tonight the UK CPI and PPI together with retail prices is huge for the FTSE and the pound.
In Europe, the ZEW surveys for Germany and the EU will be released, while in the US we get New York Empire manufacturing, TIC flows and the NAHB housing market index.