Your morning market update features highs matched only by Adelaide’s weather and Colorado news correspondents.
– A big night for stocks with new records on both sides of the Atlantic. The S&P 500 hit 1,851 as a result of the stronger than expected Bank of America report and the result from the New York Empire Manufacturing Index (12.51 against 3.75 expected) was the strongest from 2012. Producer prices also rose up 0.4% as expected.
– The release of the Fed’s Beige book didn’t really add too much to the debate, reiterating that “economic activity continued to expand” in most of the regions surveyed.
– So with 35 minutes to go before the close, the Dow is up 100 points or 0.61% to 16,473. The Nasdaq is up 0.69% and the S&P is up 8 at the moment to 1,847 for a gain of 0.44%.
– In Europe, the DAX fairly roared, which is counter-intuitive given that German GDP came in at 0.4% against 0.5%. Perhaps traders were both following US traders and thinking the ECB might need to do something about weak European growth.
– At the close, the DAX was up 2.03%, the CAC rose 1.35% and the FTSE moved up 0.79%. In Spain, the IBEX 35 rose 1.35% while the FTSE MIB index in Milan was 1.60% higher.
– On the ASX, in overnight SPI 200 futures trade the March contract is up 25 points to 5229 bid.
– On FX markets, the US dollar was stronger across the board. Euro has fallen 0.57% to 1.36, GBP lost 0.44% to 1.6363 while the US dollar gained 0.69% against the Swiss franc to 0.9086. The yen was under a little pressure too, losing 0.36% as USDJPY rose to 104.57 while the Aussie dollar has fallen quickly from favour, trading down to a low of 0.8885 before recovering to 0.8914 this morning for a loss of 0.57%.
– On Commodity markets, the big news was a massive draw in crude inventories reported by the EIA in the US. The market was expecting inventories to fall by 700,000 barrels but the EIA reported an incredible 7.65 million barrel drop. Naturally, Nymex Crude traders had to cover shorts and Jan contracts bounced 1.91% to $94.36.
– Gold was 0.57% weaker on the back of US dollar strength, while Copper rose 2 cents to $3.40 lb. On the Ags, Corn lost 1.22%, Wheat fell 1.99% and Soybeans rose 0.84%. Bitcoin sits at $935.
On the data front today ion Australia we get the employment data for December. The market is loooking for a rise of around 10,000 and unemployment of 5.8%. Employment lags but lead indicators suggest it might do better in the months ahead.
Tonight we see German and Eurozone CPI which will be very important for ECB and thus Euro expectations. US CPI later in the night is equally important for Taper expectations. The Philly Fed index is out and and the market will also be watching the TIC flows to see what foreigners are ding with US assets