It’s Monday – let’s go:
– Another piece of weak US economic data on Friday hit stocks with existing home sales printing a fall of 5.1% in January over December’s number. Given the 60-90 day lag on this data, due to it being “sale close” based, it’s unlikely the weather was a big impact on this release which seemed to weigh heavily on traders.
– The result was that the Dow, Nasdaq and S&P 500 all finished a little in the red. At the close the Dow lost 0.19% to 16,103, the Nasdaq fell 0.11% and the S&P 500 drop 4 points or 0.21% to 1,836. Of note is that US markets had been in the black early and closed on, or near, the lows of the day.
– In Europe however the markets were mostly higher after early losses as the US was in the black when they closed. The FTSE was 0.37% higher, the DAX rose 0.40% while the CAC was 0.59% higher. In Madrid stocks eked out a 0.09% gain while in Milan stocks fell 0.29%.
– Locally the ASX March SPI 200 futures fell 1 point to 5413 bid.
– China’s Finance Minister might have surprised a few over the weekend when he said that the Fed’s Taper is good for China. But his context was dead right insofar as he said that it meant the US economy was recovering. But in a pointed message to his G20 colleagues Lou Jiwei said “growth rates like those in 2009 and 2010, when China contributed 50% of world growth, that is not sustainable”.
– Turning to global FX markets it is worth noting that so far the Euro has ignored the weak EU data and threat of deflation and or ECB reaction but Mario Draghi hinted in Sydney over the weekend that something is coming down the pipe noting that March is the likely date for a decision. “By then we’ll have the full set of information needed for us to decide whether to act or not,” he said. Of course he said or not, so it’s not a done deal but with Euro near the top of the recent range the risk is of some pullback over the next week or so.
– Anyway this morning in Asia Euro sits at 1.3730, USDJPY is at 102.47 and GBP remains under pressure at 1.6625 with a little lift from Mark Carney’s comments about the UK economy over the weekend. The Aussie sits at 0.8970 down a little with upside momentum fading once again.
– On commodity markets gold rose close to $7 to $1325 up 0.52%. Copper rose 1 cent to $3.34 while crude slipped 0.52% to $102.30. The Ags were mixed with corn down 0.60%, wheat fell 1.05% while soybeans rose 0.92%.
On the data front today it is quiet in Australia but the German IFO index will be watched closely tonight as will EU CPI and the US Chicago Fed Activity index and Dallas Fed Manufacturing business index.