Your morning market update, where “recovery” translates to “everything is down”.
– The global data flow of Purchasing Managers Indices showed an economy in recovery mode. Pretty much every major jurisdiction either matched or exceeded last month’s numbers and the UK and the US in particular stand out as very strong results, with the UK PMI printing 58.4 and the ISM in the US 57.3. Both were much stronger than expected.
– But this is a market where good economic news is likely to put the brakes on Fed, Bank of England and or ECB monetary largesse, so stocks didn’t take the solid PMI releases that well.
– At the European close, the FTSE was down 0.84% to 6,595, the DAX was down just 0.04% and the CAC fell 0.21% but stocks in Milan and Madrid came under heavy selling, falling 1.52% and 0.93% respectively.
-In the US, the Dow is down 0.49% to 16,007, the Nasdaq off 0.37% to 4,045 and the S&P has just lost 5 points toward the end of day and sits back at 1801, down 0.27%. Watch out for headlines if they all manage to slip back below these much hyped levels.
– On the ASX at 8am AEDT, the Dec SPI 200 contract is down another 24 points to 5,260 as the decline accelerates. Dec 3- and 10-year bonds are down 2 points each.
– On global FX markets, the US dollar got a little bit of its mojo back from the strong ISM figures with USDJPY now above 103 and on its way to 104 at least. The Aussie was hit back from strength which saw a high at 0.9168 and traded down to a low of 0.9086 early this morning. It now sits at 0.9102. GBP is off a high of 1.6442 (not a typo) back at 1.6352 this morning and the euro sits at 1.3541 after a brief foray above 1.36 at one stage.
– What a wild ride Bitcoin was in our time zone yesterday. Early doors down below $850 and then back up above $1100 later in the day and it sits at $1078 this morning. Amazing ranges and price action – instability reigns. It seems to reign in the gold market as well with the yellow metal falling more than $30 to $1219 oz just when it looked like it might have found support in the $1240/50 region. Silver lost 4.23% to $19.14, Nymex crude rallied $1.25 to $93.97 (Australian petrol prices on the up with the Aussie down) and Copper sat at $3.22 lb. On the Ags, Corn was 0.30% higher but Wheat and Soybeans fell 0.8% and 1.2% respectively.
On the data front, it is another big day for Australian traders with retail sales and the RBA Board meeting. No one expects the RBA to move rates but the language around the economic stimulus and the Aussie dollar’s level will be interesting to traders trying to read the tea leaves.
Elsewhere we get the Chinese non-manufacturing PMI, house prices and construction PMI in the UK, New York ISM in the US along with the Redbook index and the IBD economic optimism index.