Your morning market update has the yen in control.
– A poor night on US stocks as the reverberations around the weak non-farm payrolls continues and a Goldman Sachs analyst echoed Business Insider’s Henry Blodget, saying that “stocks are over valued by almost any measure”.
– So with 30 minutes to go before the close the Dow, Nasdaq and S&P have spend most of the day drifting steadily lower. The Dow is down 1.08% or 178 points to 16,258, the Nasdaq has lost 1.67% and the S&P 500 has dropped 24 points or 1.32% to 1,819.
– European stocks did better, particularly after the BIS eased the leverage ratio and some other important reforms Sunday. At the close, the FTSE was up 0.25%, the DAX climbed 0.39% and the CAC rose 0.29%. Milan and Madrid stocks rose 0.65% and 0.73% respectively. For all the trade that happens in the London timezone, it really is the worst possible timezone – always a day behind and we’d expect Europe to have a bad day tonight.
– On the ASX overnight, futures trade on the March SPI 200 contract has seen it lose 51 points to 5209 bid. Bonds rallied in concert with further moves in US Treasuries which fell to 2.83%. The 3-year bond future gained 3 points while the 10’s rallied 4.5 points to 95.865 (4.125%)
– On FX markets, the US dollar weakness continued but it is the yen that has pushed all before it over the past 18 hours or so, dropping down to 102.88 in USDJPY terms (fall in USDJPY equals yen strength) from a high of 104.13. EURJPY came under pressure as well and has fallen more than 100 points from lunchtime yesterday to 140.63 this morning. AUDJPY is also down but less so because AUDUSD is up 0.71% to 0.9064. Euro, on the other hand, hasn’t been able to pick up any ground on the USD and sits at 1.3670 with GBP down 0.58% to 1.6384.
– The US dollar’s troubles have been a boon for Gold bulls which, while only up $6 or 0.48%, is crucially above the $1250, sitting at $1252.70 this morning. Crude reversed Friday’s rally as the powers get closer to a nuclear deal with Iran and the prospect of as much as 1 million barrels a day hitting the market. My own studies suggest that technically Nymex crude is now on its way to $85 Bbl.
– Elsewhere, Copper lost 1 cent to $3.39 lb, Corn gained another 0.29%, Wheat rose 0.79% and Soybeans had a good move, trading 1.79% higher. Bitcoin sits at $909.
On the data front, there is nothing of note in Australia today. We’ll see Japanese trade data before a raft of CPI and PPI data in Europe, which will give a clearer indication of the ECB’s need – or not – to do something unconventional. UK retail sales are also out and then in the US we also see the very important US retail sales data, business inventories and speeches from Fed Governors Plosser and Fisher.
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