Your morning market update sees some moves under way in Europe.
– Europe is the most interesting port of call overnight with the BoE upgrading its growth forecast (2.8pc next year, from a prediction of 2.5pc in August) and the ECB defending the recent rate cut (Weidmann, Bundesbank Head) and not ruling out the use of unconventional policies such as quantitative easing.
– Not surprisingly, GBP (1.6018) rallied and euro (1.3455) sold off. But whereas sterling has stayed strong, euro bounced off a low of 1.3389 and is actually up 0.15% on the day – still lagging GBP’s 0.68% gain but a solid recovery nonetheless.
– In other FX markets, the Aussie dollar (0.9327, +0.26%) got a lift as the US lost a little strength and USDJPY (99.38) respected the trendline resistance, up near 100.
– On the stock markets, Asia and Europe’s weakness saw US markets open lower but the nadir for the day was early and they rallied from here. At the close, the Dow is up 0.45% to 15,821, the Nasdaq rose 1.18%% to 3,966 and the S&P 500 is up at 1,782 for a 14-point gain, or 0.81%.
– In Europe, stocks were lower with the FTSE having its worst day in 3 months, falling 1.44% to 6,630. Losses were smaller on the DAX and CAC, which fell 0.24% and 0.56% respectively. Spanish stocks were 0.34% lower, while in Milan stocks tumbled 1.43%.
– Closer to home, on the Sydney Futures Exchange the SPI 200 contract fell 7 points to 5327 bid. It has big support at 5278 trendline. On the bond boards, 3-years rallied 5 points and 10-year bonds 6.5 points in concert with the fall in US 10’s, which dropped 6 points to 2.72%. UK 10’s ended flat at 2.62%, while Bunds were 5 points lower at 1.74%.
– On commodity markets, Bitcoin is on a tear again and busted $400 with a run to 429. It sits at 423 at present. Nymex Crude ($93.91, +0.87%) is bouncing from near the bottom of a 15-month trendline which comes in at $91.31 Bbl. Gold fell 0.22% at $1273.20 while Silver lost 1.41% to $20.48. On the Ags, only Corn moved, losing 0.52%.
– Copper is gone technically now and could fall quite a bit, which might impact some miners. Last night it fell to $3.16 – a loss of 7 cents a pound, or 2.24%. The target is now around $3.02.
On the data front, New Zealand retail sales are out along with Japanese GDP and industrial production data. There is nothing of note in Australia for traders, although I note the ABS is realising a report on whether Australia is becoming a better place to live.
Tonight could be huge for the euro and European stocks with French, German, Italian, Portuguese and EU wide GDP out along with UK retail sales. In the US, it’s jobless claims and the big one – we hear from the next Fed boss, Janet Yellen.