Here's Your 20-Second Guide To What Aussie Traders Will Be Talking About This Morning

Your morning market update sees the euro under pressure.

– The EU has downgraded its expectations of growth in 2014 again overnight from 1.2% to 1.1% from the 1.4% earlier this year. It’s a weak outlook but still above Westpac’s -0.1% I saw in Imre Spiezer’s piece this morning.

– This combined with stronger US and UK manufacturing data put the Euro under pressure against the USD (1.3473) and GBP (0.8396) and the strength in the euro that was in evidence till last week’s inflation and unemployment data seems a distant memory now.

– The data that knocked the euro lower also hit US stocks initially, with the ISM non-manufacturing index printing at 55.4 versus 54 expected (UK print). The key here is that the data is suggesting the government shutdown may not have caused as much, or as wide, an economic disruption as many expected. Perhaps US citizens, like the stock market, just got on with things in the belief a deal would eventually get done.

– So at the close of trade (8am AEDT for the next 4 months) the Dow has recovered from a more than 100-point fall to be down 21 at 15,618. The Nasdaq also recovered from an early fall and is in the black to the tune of 0.09%. The S&P 500 bounced off 1756 to sit at 1763 down 5, or 0.28%.

– In Europe, the FTSE was 0.25% lower, the DAX fell 0.31% and the CAC dropped 0.83%, while stocks in Milan and Madrid were 1.13% and 0.79% lower.

– On the Sydney Futures Exchange, the SPI 200 contract is unmoved at 5417 bid but the range was 5399 – 5422, reflecting the early US weakness. On the bonds, the 3’s are down 4 points and the 10’s have fallen 4.5 points, reflecting the move higher in the US and UK interest rate markets after the strong data. 10-year US Treasuries are up 5 points to 2.66% while Gilts rose 10 points to 2.56%. Even Bunds, Italian and Spanish bonds were dragged higher.

– In FX Land, as noted above, the US dollar knocked the euro lower but it lost ground against sterling, which rose 0.48% to 1.6044. The yen is essentially unmoved at 98.54 and the RBA’s call out for a lower Aussie dollar in yesterday’s statement had an impact, albeit limited. The Aussie sits at 0.9490, down 0.21% this morning.

– On Commodity markets, Bitcoin is ripping higher once again, up at 253 this morning for a gain of 40 in the first two days of trade. Nymex crude is the one to watch though, as it fell another 1.24% overnight to $93.45. It’s now less than $2 Bbl away from super important support, according to the technicians, at $91.69, which is both the 200 week moving average and uptrend line from 2009 low. Gold fell 0.5% to $1308 oz while on the Ags, Corn, Wheat and Soybeans fell 0.12%, 1.02% and 0.38% respectively.

On the data front today we see New Zealand labour data, BoJ monetary policy decision, Australian trade and then a raft of Markit Services PMI’s tonight in Europe as well as German factory orders and US Mortgage applications

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