Today morning market update, where almost everyone’s kicked a goal.
– Stocks in the US reversed the previous night’s weakness as better than expected US retail sales gave hope that the non-farm payrolls really was just a weather-related aberration. Rising 0.7%, ex-auto sales were much stronger than the 0.4% expected. Also out was a raft of European inflation measures which hit expectations but Eurowide industrial production printed a much stronger than expected 3% yoy. The monthly number was 1.8% in November which reversed the 0.8% fall the previous month.
– So at the close, the unrelnting weakness of Monday gave way to strength from the start as the Dow rallied 110 points or 0.68%, the Nasdaq rose by 1.69% and the S&P regained almost all of the points lost the day before, rising 20 to 1,838.
– It was a similar story in Europe, where night futures weakness gave way to strength during the day. By the close, the big markets were all in the black. The FTSE rose 0.15%, the DAX was 0.32% higher while the CAC rose 0.25%. In Madrid and Milan, stocks rose 0.17% and 0.16% respectively.
– On the ASX overnight, the SPI 200 rallied 31 points to 5206 bid while the bonds sold off a little in line with the weakness in the US 10-years, which rose 5 points to 2.88%. On the SFE, the 3-year contract lost 4 points as did the 10-year bond, which finished at 95.82 (4.18%)
– On FX markets, as a result of the above and also on the back of hawkish taper comments from Fed Governors Plosser and Fisher, traders built on a reversal of the previous night’s trade that began in Asia after the worse than expected Japanese trade position yesterday. It showed a big deterioration in the current account deficit – yes, deficit – of 592.8 billion yen.
– As a result, the yen weakened against both the US dollar (104.14) and euro (142.48). This also put pressure on the Aussie dollar, which slipped back through support at 0.9025 and sits this morning below 90 cents at 0.8962. GBP is higher at 1.6442.
– On commodity markets, Gold couldn’t hold $1250 and lost 0.46% to $1242.40. Crude reversed the previous night’s weakness, rising 0.80% to $92.53, while Copper sits at $3.39 for the second day in a row. Corn lost 0.46%, Wheat rose 1% and Soybeans were 0.92% higher.
On the data front today, we get new motor vehicles in Australia and some interesting foreign investment and new loan data in China. In Singapore, it’s retail sales and in Japan, machine orders are to be released. Tonight sees some big releases with German GDP US PPI and the Fed’s Beige Book early tomorrow morning.