Your Friday market update has the US feeding off Europe.
– Janet Yellen’s Senate confirmation hearing went off without a hitch and with some significant deference from most Senators which is a great sign she’s a shoe-in for the job. But markets were focused on comments she made that the Fed’s unconventional monetary policy, QE, would continue for as long as was necessary.
– The Dow is up 0.3% to 15,876.2, the Nasdaq is up 0.1% and the S&P 500 has made another new high and currently sits up 8.6 points to 1790.6.
– European growth data was out overnight and the prints were not very encouraging unless you are keen to see the ECB carry out its own version of quantitative easing. EU-wide GDP for Q3 printed -0.4% where -0.3% was expected. Germany hit expectations of 0.3% growth in Q3. France missed, printing -0.1% against expectations of +0.1%. In the UK, retail sales unexpectedly fell 0.7% in October.
– But weak data didn’t deter European stock traders, who continued the rally from Asia. The FTSE closed up 0.54%, the DAX rose 1.05% and the CAC was 1.04% higher. In Milan, stocks fell 0.15% and in Spain, stocks fell 0.35%.
– Closer to home, at 6.30am AEDT, the SPI 200 Futures contract on the Sydney Futures Exchange were down 1 point to 5362 bid. On the Bond Boards, the 3-year contract is up 2 points and the 10’s have risen 2.5 points reflecting the better tone in bond markets globally on the back of weak European growth.
– On FX Markets it was a night of US dollar strength or realistically, European weakness feeding US strength, with the euro sitting at 1.3444, down 0.31% on the day and off the high just near 1.35. Surprisingly, GBP hasn’t really budged and sits at 1.6057 while the USD is stronger against the Yen up 0.86% at 100.07 and testing important trendline resistance – which shouldn’t hold on this attempt.
– The Aussie dollar caught a few bears in a trap yesterday running up to a high of 0.9385 but it is back at 0.9310 now off 0.5% and looking wobbly into week’s end.
– On commodity markets, our friends who trade Bitcoin have been busy and the range in Asia yesterday was huge as it moved through 10% with a low of 402 and a high of 447. It sits at 426 now. Nymex crude was down 0.26% to $93.64 Bbl, Gold rallied 1.41% to $1289 but Silver is still pressured falling 1.62% to $20.48 oz. Copper was unchanged at $3.16 lb. Corn fell 0.87% but Wheat and Soybeans were fairly quiet.
It’s a quiet end to the week with now big data prints to attract the attention of traders. Maybe EU CPI – if it’s low – might increase expectations of unconventional monetary policy from the ECB, but the only other minor major piece of data is the Chinese FDI data today and the NY Empire Manufacturing Index in the US tonight.