Here’s your morning market update.
– German IFO increased in September to a 17-month high of 107.7 but undershot expectations of a rise to 108.2. Interestingly, the “current assessment” actually fell, which accords with the manufacturing PMI data a night ago, so Germany might be having a soft patch.
– The IFO and comments from ECB boss Mario Draghi a day ago – which were echoed by Ewald Nowotny of the ECB – about continuing stimulus in the EU sent the Euro lower (1.3478) and contributed to overall USD strength, which also dragged the Aussie dollar (0.9390) back below 94 cents. However, the moves were really marginal, with USDJPY sitting at 98.80 and Sterling at 1.6006.
– Data in the US was a little mixed, with the Case-Shiller House price index up 12.4% year-on-year as expected from 12.1%. Consumer confidence fell to 79.7 from 81.8 last year.
– Stocks in the US were up initially but have been unable to hold onto gains, probably due to the Senate debating the Federal Budget. So the Dow was closing on its lows down 66 points, or 0.43% at 15327 off an intraday high of 15434. The Nasdaq rose 0.07% and the S&P fell 5 points to 1697 for a loss of 0.28%, but 10 full points off the high of the day. Stocks in Europe missed the late afternoon sell-off and had a positive day, but US confidence looks to have weighed initially before a recovery. In London, the FTSE closed up 0.21%, the DAX rose 0.34% and the CAC was 0.57% higher. In Milan stocks rose 0.85%, while in Madrid, stocks were 0.64% higher.
– Rates in the US rallied in the 10 years, which fell to 2.64% at one stage, before closing at 2.66%. Bunds fell 8 points to 1.84% and Gilts rallied 11 points to 2.62%.
– On Commodity markets, Gold fell a little again but sits around the $1325 oz region, Nymex crude is at $103.45 Bbl, while Copper lost a few cents to $3.27 lb. On the Ags, Corn dropped 0.94%, Wheat rose 0.69% and Soybeans were up 0.32%.
– Closer to home at 5.40am Sydney time, the SPI futures on the Sydney Futures exchange were up a few points at 5245 while the 3- and 10-year bond contracts were up 4 and 4.5 points respectively, reflecting the moves in US and global interest rates overnight.
On the data front today we get Kiwi trade data, the RBA’s Financial Stability Review (interesting in the context of whether they say anything about Bank lending standards), and then tonight Gfk Consumer Confidence and import prices in Germany, French Business Climate and Durable Goods orders in the US, and Mortgage applications and New Home Sales.
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