– The main story from a macro perspective overnight is that the IMF upgraded its forecast for global growth in 2014 and 2015 to 3.7% and 3.9% respectively. But it warned against a rush to higher rates and noted the fragility of the recovery at the moment.
– In the US, stocks are rallying as we head toward the close, with the Dow recovering from the lows of the day but still in the red under pressure from Goldman Sachs and Verizon. With 30 minutes before the close, the Dow is down 0.30% to 16,405 but the Nasdaq and S&P 500 are firmly in the black up 0.51% and 0.11% respectively with the S&P sitting at 1,841.
– In Europe, Unilever PLC’s 1.8% rise couldn’t stop the FTSE from falling as it was weighed down by mining stocks and closed down 0.04%. In Paris, the CAC rose just 0.03%, while the DAX was 0.15% higher. In Milan, stocks were quiet – up 0.11% – but in Madrid they fell 0.93%.
– Locally on the ASX overnight, the SPI 200 March contract is down 7 points to 5280 bid, no doubt effected by the miners’ weakness that was evident in London overnight. On the Bond boards, the 3’s and 10’s are up 1 point even though US treasuries rose 1 point to 2.83% overnight.
– On FX markets, the euro was pressured early by the weaker than expected German ZEW economic survey, which printed at 61.7 against expectations of 64, even though Europe-wide sentiment was stronger. On the day though, it is largely unchanged at 1.3565. GBP is higher again at 1.6477, driving EURGBP lower to 0.8229 and looking like it has further losses to come. USDJPY lost its early strength and sits at 104.22 this morning, while the Aussie was around 30 points either side of 88 cents but this morning sits at 0.8802.
– Turning to commodities, it was a positive night for Crude which rose on the back of the IEA’s upgraded demand outlook for 2014. Nymex Crude rose 0.66% to $94.88 Bbl. Gold was lower however, having failed on Monday at trendline resistance – it’s down 0.75% at $1240 oz. Copper rose 1 cent to $3.38 lb even though there was a downgraded forecast from Goldman Sachs who think it will fall to $3.11 this year on the back of a surplus in supply. On the Ags, Soybeans fell 2.83%, Wheat fell 0.22% and Corn rose 0.18%. Bitcoin sits at $958.
On the data front today, in Australia we see the release of both the Westpac Consumer Sentiment survey and the ABS Q4 2013 Consumer Price Index. After the bigger jump in the TD monthly inflation index earlier this week, there might be a little more volatility than usual but the market is expecting between 0.5% and 0.7%, neither of which will change the RBA outlook for interest rates.
Offshore, the BoJ and BoCanada have monetary policy decisions while the minutes from the last BoE meeting will be released. Also out in the UK will be the employment report. In the US, we have mortgage applications and the monthly Redbook survey.