It’s Friday and the cricket’s back on the telly. But there’s still some work left to do this week:
– Bad news was good news overnight on both sides of the Pacific as weaker data in the US lessened concerns about the Taper letting stocks rise, while the Australian economy benefited from some aggressive language from RBA Governor Stevens and weaker-than-expected Chinese data which knocked the Aussie dollar lower.
– Looking first at the US and stocks producer prices fell 0.2% in October, consumer confidence fell further to -15.4 and the Philly Fed undershot expectations by a mile, printing 6.5 against 15.5 expectations. These data overshadowed the strength in the US Markit PMI, which printed 54.3. That helped the stock market take a bid tone, resulting in the Dow closing up 109.17 on 16,009.99 for rise of 0.69%. The Nasdaq is up 1.22% (3,969.15) and the S&P 500 is up 14.48 or 0.81% at 1,797.85.
– Interestingly, US interest rate markets didn’t catch the bid stocks did and the 10-Year Treasury is sitting at 2.79% just 2 points lower. In Europe, rates rose with bunds up 3 points (2.79%), while in the UK, rates were 9 points higher at 2.66%.
– European stock markets didn’t catch the US bid however, given that Mario Draghi hosed down expectations of negative interest rates which were floating around the day before and the German Markit PMI printed in line with expectations. At the close, the FTSE was flat at 6,681 and the DAX hardly budged in closing at 9,196, but both these end of day levels belie early acute weakness. The CAC was 0.34% lower, while in Milan and Madrid, stocks were 0.61% and 0.41% higher respectively.
– On local markets, the SPI 200 contract on the SFE is up 37 points to 5337 bid. On the bond boards, the 3’s are up 4 points and the 10’s have risen 3.5 points.
– On Forex markets, Draghi’s comments and weak US data helped lift the Euro off its 1.3398 low and it sits at 1.3457 this morning. GBP is up 0.32% to 1.6155 and USDJPY has finally broken through solid resistance and it sits atop 101 at 101.03 this morning. The Aussie was hit by Stevens and is at 0.9224 – a full 100 points off where we were around this time yesterday.
– On Commodity markets, gold is at $1245 this morning largely unchanged from yesterday, Nymex crude continues to respect support and is up 1.48% to $95.24 and copper rallied 4 cents or 1.22% to $3.20 lb. Our friends mining and trading Bitcoin have driven the price up to $771, and if you look at a chart of the successive rises and crashes over the past few months, there is every chance it’s at $1000 next week as some “charty” types have suggested.
On the data front, the German GDP is the big print tonight along with the Ifo business survey, also in Germany. Other than that, there’s a bit of Canadian data on retail sales and CPI and the Kansas Fed manufacturing index.