Here’s your morning market update. Also, Australia won the cricket.
– US data disappointed overnight and this morning the Fed’s Beige Book Mentioned ‘Weather’ 119 Times which implies that the Fed thinks that the weaker data is a result of natural, not economic, forces which also implies a continuation of the taper unless they are convinced otherwise.
– Specifically in the US, the Markit Services PMI (53.3) and the ISM non-manufacturing PMI (51.5) both undershot expectations along with the ADP employment number which printed 139,000 against expectations of 160,000 jobs. This was in contrast to EU services PMI’s and EU retails sales, which were relatively strong.
– The impact on US stocks was muted however, with the Dow 0.22% lower at the close. The Nasdaq is up 0.14% and the S&P 500 is flat at 1874.
– European stocks had a very divergent night with the FTSE down 0.71% and the DAX down 0.49%. Both these exchanges were in decline for most of the day while stocks in Madrid and Milan, which rose 0.87% and 1.38%, were higher for most of the day. The CAC finished down by 0.11%.
– Locally on the ASX futures market overnight, the SPI 200 March contract fell 14 points to 5438.
– On global FX markets, GBP and the Aussie are both up about 0.4% at 1.6730 and 0.8983 respectively. The Aussie remains stubbornly strong but if you look at US data versus the pick up – or apparent pick up – in Australian growth versus the slow down in the US it makes sense. The RBA may not be too keen on it but that’s the way it is. USDJPY is little moved at 102.29 as is euro at 1.3736.
– Of interest in the next 24 hours for FX traders is the ECB meeting tonight after Mario Draghi recently promised that it would decide what to with monetary policy during March. Overnight the IMF offered some advice by saying that rate cuts were needed in Europe along with quantitative easing. We’ll see and it might help explain why the euro is underperforming GBP’s strength.
– On commodity markets, Gold is largely unchanged at $1338.90 oz, Nymex crude is down 1.95% to $101.32 Bbl after a bigger-than-expected oil stocks build while Copper sits at $3.25 lb. After the recent big moves, the Ags had a much quieter night with Corn down 0.16%, Wheat off 0.39% and Soybeans up 0.14%.
On the data front today, we get retails sales in Australia along with the trade data before German factory orders, the BoE and ECB interest rate decisions and the ADP employment survey in the US before the non-farm payrolls tomorrow night. Initial jobless claims are also out in the US tonight.