Your morning market update sees the Aussie lagging.
– The debate is certainly raging about this stock market rally as US stocks ended trade on Friday strong and the S&P 500 closed the week at an all-time closing high of 1760 up 8 points or 0.45%. The Dow finished at 15,570 up 0.39%, while the Nasdaq is up 0.36% and awaiting Apple’s results tonight.
– Data on Friday didn’t support the rally, with durable goods falling 0.1% when you strip out aircraft and the other volatile transport items. Equally, consumer confidence fell again, undershooting expectations and printing 73.2 from 77.5 last. But Amazon and Microsoft were solid results and UPS’s delivery data was also a positive.
– In Europe, UK GDP rose just 0.8% in Q3 and German IFO business index undershot slightly at 107.4. That didn’t stop the DAX from heading through the 9000 mark for the first time, just from closing there with the Frankfurt exchange ending the week at 8,986. In London, the FTSE was up 0.12% and in Paris the CAC was down just 0.09%. Spanish stocks fell 1%, while in Italy the heat is rising on Silvio Berlusconi and the MIB fell 1.45%.
– Closer to home, the Sydney Futures Exchange was 33 points higher on the SPI 200 contract, so it should be a solid open before the banks start to report this week. On the bond markets, the 3 years were unchanged while the 10s lost 2 points. In the US, 10-year Treasuries finished at 2.52%, Gilts closed at 2.45% and Bunds at 1.76%.
– On FX markets, the US dollar is under intense pressure and the USD Index is less than 1 full point away from a material break which could see it cascade lower. 78.50 is the level to watch and while it would be expected to hold initially, a break would signal a big move higher for the Aussie, euro, sterling and of course, yen.
– Looking specifically at the Aussie, it closed off its lows at 0.9584 but continues to look under a little pressure. Technically the focus is lower, which means on the crosses it is underperforming the likes of the euro (1.3807), sterling (1.6166) and yen (USDJPY, 97.61).
– On commodity markets, Nymex crude continues to hover below $100 with the price closing at $97.90, Gold is sitting at $1351, Silver at $22.42 and Copper $3.26. Corn was largely unchanged, Wheat down 0.83% and Soybeans fell 0.74%.
On the data front, it’s about earnings here at home, with the majors up this week. The US earnings season continues and it’s a very quiet day in Asia with nothing until German retail sales tonight, then industrial data and pending home sales in the US.
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