Your morning market update has the Aussie ready to break out.
– The US was out for the Columbus Day holiday but stock markets were still open and Senate leaders Reid and McConnell continued, without success so far, to try to hammer out a deal as the deadline for the debt ceiling draws near. All up you could say it was a good day. A really good performance actually, especially for stocks which at the open of global trade were under real pressure but came back strongly by the end of US trade.
– At the close the Dow was up 0.42%, the Nasdaq rose 0.61% and the S&P finished up 0.40%. In Europe, the negativity that gripped global markets early was in evidence with the FTSE in London opening down around half a per cent at 6464 before closing at 6508 for a gain of 0.32%. The DAX and CAC were virtually unmoved, while stock markets in Milan and Madrid were 0.19% and 0.28% higher.
– Closer to home, the recovery in US and European stocks has seen the Australian stock market surge in futures trade overnight, with the SPI 200 contract up 41 points to 5247 bid. Looks like today will be a good day on the market and if the SPI can take out 5260 it might get a wriggle on. On interest rate futures markets, there was more heavy volume with the 3- and 10-year bond contracts down 6 basis points, implying yields to rise by the same amount in trade today.
– On Forex markets, amidst a general trend to US Dollar weakness in the past 24 hours, the Aussie Dollar is very close to a big breakout, sitting at 95 cents this morning off a low of 0.9408 yesterday morning. It’s not there yet, but 0.9520 is the top of the Box or range it has been in for some time now and a break could usher in a move to 0.9770.
– Elsewhere, the Euro sits at 1.3565 up 0.16%, GBP is up 0.23% at 1.5986 while the US Dollar did gain ground against the Yen, rising 0.43% to 98.49.
– On commodity markets, Crude was quiet at $102.13 Bbl, Gold was up 0.66% to $1278.70 while Copper rose 1% to $3.30 lb. In context though, Copper has been running on the spot for some time now. Corn rose 0.81%, Wheat was essentially unmoved and Soybeans rose 0.45%.
Data-wise, the Home Loan outturn yesterday in Australia showed there remains little pressure building in the housing market, while the CPI and PPI data in China was higher than the market had expected.
Over the next 24 hours we get motor vehicle data in Australia and the RBA minutes from the last meeting, which are likely to be AUDUSD supportive if I read the statement from this month’s board meeting correctly. FDI in China is out, as is Japanese Industrial Production and then CPI and PPI in the UK and the ZEW survey in Germany.