Here’s your morning market update, with US stocks and dollar both coming under some sustained pressure.
– Stocks in the US were down for the fifth day in a row, the longest losing streak this year, as the euphoria of No Taper gives way to concerns about the US budget and the Debt Ceiling negotiations. The Dow closed down 0.40%, the Nasdaq fell 0.19% and the S&P 500 fell 0.26%. In Europe, stocks were largely unchanged on the continent, with Germany up 0.02% and France down 0.01%. The FTSE fell 0.30% while stocks in Milan fell 0.14%.
– With concerns about the US fiscal and debt situation dominating, it was no surprise that the US dollar came under pressure. The weakness is mainly against the big pairs of the Euro (1.3524, +0.39%), GBP (1.6084, +0.51%) and Yen (USDJPY 98.46, -0.27%), while the Aussie(0.9364, -0.27%) and Canadian dollar (1.0311, -0.13%) were dragged down by the weakness in risk appetite.
– Giving credence that this is a risk off move is the fact that rates fell as US 10-years rallied 4 points to 2.62%, Bunds fell 1 point to 1.83% while Gilts fell 4 points to 2.58%.
– Along the same lines, Crude oil fell another 0.85% to $102.25, and Gold rallied 1.51% to $1335 oz, while Silver was 1.39% higher. Copper was up a cent at $3.27 lb and the Ags just keep being volatile, with Corn up 1.17%, Wheat 1.79% higher and Soybeans rising 0.72%.
– The impact closer to home has been that the SPI200 Futures trading on the Sydney Futures Exchange has fallen 8 points to 5268. On rates markets, 3- and 10-year bonds are up 3 and 4.5 points respectively, continuing the recent rally in Australian rates.
– Overnight data in the US and Europe was kind of mixed, with the Gfk Consumer Confidence in Germany up 0.1 to 7.1 while Durable Goods in the US ex-Transportation undershoot expectations by falling 0.1% against expectations of a 1% rise.
On the data front today we’ll all still be watching and thinking and worrying about the potential disruptive impact of this US fiscal and debt debate. Singaporean Industrial Production will be interesting, as will UK GDP tonight and then the next read on US GDP, the usual jobless claims data and personal consumption and pending home sales before the Kansas Fed manufacturing index.
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