Good morning and welcome to Tuesday. I’m Greg McKenna.
– Stocks in the US were higher last night even though the Fedspeak implied not only a continuation of the taper but an eventual increase in rate after Fed Presidents Williams and Fisher both warned of the long-term dangers of super easy monetary policy.
– At the close, the Dow was up a marginal 0.13% to 16,512, the Nasdaq rose 0.87% to 4,126 while the S&P 500 picked up 7 points or 0.38% to 1,885.
– In Europe, things were more mixed with the FTSE down 0.16% to 6,845, weighed down by the miners. In Europe, the Dax and CAC were both 0.31% higher even though Astra Zeneca shares tanked 11%. In Milan and Madrid, stocks reversed with the FTSEMIB falling 1.6% and the IBEX down 0.5%.
– Locally, the ASX came under heavy selling pressure yesterday but the futures have rallied 20 points overnight with the SPI 200 June contract at 5434 bid. Worth noting is the June 62 Ferrous Iron Ore Swap Future was lower again overnight which could hold back the miners again and weigh on trade.
– In Asia, the Nikkei continues to be weighed down by yen strength, falling 0.64% yesterday while stocks in Shanghai fell 1.06% after the weaker housing data we highlighted yesterday morning. There is no data to catalyse any big moves today but watch the yen and RMB for signs.
– On Currency markets, the big question is whether or not this Australian budget malaise is already weighing the Aussie down. Overnight it slipped from around the 0.9365 region to a low of 0.9322 before recovering a little to 0.9333. Budgets hardly ever impact the Aussie but budget impasses – that is another story.
– Elsewhere, the euro ran up to 1.3735 but sits somewhat becalmed at 1.3708, GBP is at 1.6815 while USDJPY is static around the 101.5 region at 101.48 this morning.
– On Commodities, Nymex Crude for May delivery rose 0.58% to $102.58 Bbl, Copper sits at $3.17 lb while Gold fell $12.20 oz to $1,296.60 and Silver sits $19.35 oz. On the Ags, it was back to volatility for Corn which fell 1.34%. Soybeans rose 1.19% and Wheat was unchanged.
On the data front today, we get the RBA’s minutes to the last meeting along with the leading economic index for Australia and Japan. PPI in Germany and CPI and PPI in the UK will also be important before the Redbook index and more Fedspeak in the US.
Here is Ric Spooner, chief market analyst from CMC Markets, with his Stock to Watch:
Flight Centre’s share price has not closed below its 200 day moving average since July 2012. Back then it was trading at $19.23.
Upward momentum has waned since November last year. In February, the share price flicked below the 200 day moving average but failed to close under it. In an ominous sign, yesterday’s large red candle finished close to both the low of the day and the 200 sma. While a clear break below the average might not mean a return ticket to 2012 lows it may suggest a deeper correction.
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