Here's Your 20-Second Guide To What Aussie Traders Will Be Talking About This Morning

Christine Lagarde –

Your (late, sorry) morning market update has some reality bites from Euro in it.

– With a week to go till the FOMC meeting, the short-term topside momentum for global stocks was a little harder to find overnight with stocks mostly lower.

– Datawise, the Chinese industrial production retail sales and urban investment were on the money, with expectations coming in at +10%, 13.7% and 19.9% respectively. UK IP was also on the money at 3.2% year-on-year and Italian GDP was a tiny bit stronger at -1.8% in Q3.

– So in Europe it was a sea of red with the FTSE down 0.56%, the DAX 0.88% lower and the CAC down 1.04%. In Milan and Madrid, stocks fell 0.27% and 0.52% respectively.

– In the US, the Dow slipped just below 16,000 down 0.3% to 15,973.1. The Nasdaq is down 0.2% to 4,060.4 and the S&P 500 lost 5.7 points or 0.3% to 1,802.6.

– On the ASX in trade overnight, the SPI 200 got hammered as yesterday’s aborted rally continued into acute weakness. At 6.45am AEDT the December contract is down 41 points at 5105 bid, while the March contract is 42 points lower at 5072 bid.

– On the bonds, 3-years rallied 3.5 points in both the Dec and March contracts while the 10’s were 5.5 points higher, reflecting the 5-point rally in US 10-year Treasuries which sit at 2.8%
this morning.

– On Forex markets, the euro made a new high against the US dollar for this run at 1.3795 before backing off ever so slightly to 1.3774 for a gain of 0.28%. While we are on the euro, it is worth noting that IMF boss Christine Lagarde said overnight it was ludicrous to think that Europe’s economics woes were over – particularly with 12% unemployment. Who can argue with that on a night when Greece also showed its industrial production crashed 5.2% year-on-year in October.

– Elsewhere on global FX markets, sterling is up a little at 1.6451 but the yen has pushed back from weakness above 103 yesterday with USDJPY sitting at 102.62 this morning. The Aussie dollar has also pushed back against the greenback – and others – and sits at 0.9159 this morning, up 0.54%.

– Bitcoin was back above $1000 again overnight as it continues to be the virtual currency that can. The tightly held nature of the coins means there is unlikely to be massive selling from the core ownership unless the price looks like it is going to collapse completely, which is not the case at present. So we get used to the volatility.

– On Commodity markets, Gold spiked $28 oz. or 2.28% to $1263. Silver was its high beta self and rose 3.29% to $20.29 oz and Copper closed at $3.30 lb. Crude ripped higher again up $1.06 a Bbl or 1.09% to $98.40 on fears of bigger inventory reductions. Over in the Ags pits, Corn fell 0.23%, Wheat dropped 1.33% and Soybeans were 0.60% lower.

On the data front today, in Australia we get the Westpac Melbourne Institute Consumer Sentiment Index while in Korea we get import and export price growth as well as the unemployment rate. In Japan, we see goods prices and machinery orders.

Tonight in Germany, CPI is to be released along with the unemployment rate in Greece, which might focus a few minds on Madame Lagarde’s overnight comments. In the US, the MBA mortgage applications are released and the Nymex Crude guys and girls will be watching the draw on crude inventories when the EIA releases its weekly report.

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