Your morning market update is feeling the cold in the US.
– The big story overnight was the flash crash in Gold which dropped more than $30 oz. as 4200 contracts hit the market around 10.15am (EST). This caused a trading halt for a short time and Gold has subsequently recovered to sit around $1240 oz. this morning.
– Also of interest has been the weaker-than-expected Services PMI’s around the globe, which kicked off with the HSBC China services PMI yesterday with a print of 50.9. This was followed up with weaker results in Italy (47.9), Germany (53.5), UK (58.8) and in the US the ISM non-manufacturing PMI was also below expectations, printing 53 against 54.6 expected.
– One bright spot was that with the exception of Italy, all these misses were still in the expansion zone and EU wide and French (yes, French) services PMI were at or above expectations.
– So at the close US stocks are off their highs for the day but also off their lows with the Dow down 0.27% at 16,425, the Nasdaq is down 0.43% and the S&P 500 is down 4 at 1,827.
– In Europe it was a similar story with the FTSE flat but off its highs, the DAX is down 0.08%, the CAC fell 0.46% while in Milan and Madrid stocks rose 0.63% and 0.93% respectively.
– On the ASX the SPI 200 in futures trade overnight mirrored the offshore moves and is down 6 point to 5298 bid. In bond futures trade the 3’s rose 3 points and the 10’s 6 points in sympathy with the moves offshore in the US which fell 3 points to 2.97% and German Bunds which rallied 4 points to 1.91% after the German CPI undershot expectations at just 1.2% YOY in December.
– On Forex markets, given the above, it is difficult to reconcile the rally in the euro given the inflation outlook and the pressure this is going to put on the ECB to cut further and use unconventional monetary policy in the months ahead. But rally it did and the euro is up 0.3% to 1.3630 and off a low of 1.3570 after the Chinese data yesterday. GBP is largely unchanged at 1.6405 but USDJPY is down 0.52% to 104.31.
– Looking at the Aussie dollar, it is up slightly to 0.8960.
– On Commodity markets, Nymex crude is in danger of collapsing, according to the technicans. It sits at $93.67 Bbl through the trendline from the 2008 low and just 90 cents above an important trendline from 2012. Copper sits at $3.41 lb, up 1 cent, while in the Ags, Corn bounced 1% (weather related maybe?), Wheat was flat and Soybeans rose 0.58%.
On the data front it is worth noting that over the next few days that US markets and the economy are going to be assailed by this Arctic vortex, which might keep many traders from their desks and make trading extremely thin.
Today in Australia we’ll see the trade data for November and then tonight in Germany, retail sales and unemployment will be released along with EU CPI and PPI, all of which are super important for ECB expectations. In the US tonight, trade data is out along with the Redbook Index and the IBD/TIPP optimism index.