Lots of incremental moves around the globe with the big ones being the continuing push higher in Euro and USDJPY closing in on 104 now. Stocks ebbed and flowed a little as there was no no US data to drive markets. Certainly there was Fedspeak which mentioned the dreaded Taper word (Bullard noted the potential for a modest taper next week) but the market didn’t run away they way it might have been expected to.
Indeed while the market in the US has sold off from the highs but is still in the black for the day. At the close of trade left to go the Dow is up 0.04%, the Nasdaq is 0.16% higher and the S&P 500 is up 3 points or 0.16% at 1808.
Europe was fairly quiet on the big bourses with the FTSE and CAC up 0.11% while the DAX rose just a quarter of a percent. In Madrid and Milan it was a different story however with the stock market up 0.92% and 0.89% respectively. Trade data out of Germany showed imports rose much faster than expected at 2.9% in October while exports rose 0.2%. It has driven hopes that the German economy is re-balancing but Europe needs a weaker Euro more than a German re-balance.
At 8am AEDT the March SPI200 Contract is up 4 points to 5108 bid. The Dec Contract is down 2 at 5140 bid.
FX is the conundrum at the moment. Not dollar yen because that makes perfect sense but realistically Euro is the currency that has no hope of rallying given fundamentals but just keeps on rising. It is up at 1.3737 this morning up 0.15%, Sterling ripped higher rising 0.48% to 1.6425 as did the USDJPY which rose to 103.25 this morning after Japan downgraded its growth expectations for Q4 yesterday.
The Australian dollar continues to suffer the slings and arrows of Glenn Stevens who was out there again trying to bash it lower with comments that a downturn was inevitable at some point yesterday. The Aussie fell to a low of 0.9068 overnight but it is back at 91 cents, or thereabouts, this morning.
Still targetting a move to 92 cents but it has to get above 0.9150 first. I cut my posi in half but I am still long AUDUSD.
On commodity markets Gold continues to find support in the mid to low $1220 region and has rallied $5 dollar or 0.41% to $1243 . Silver is the high beta precious and is up 1.10% at $19.68 oz and copper sits at $3.29 lb up just shy of 0.7%. The Ags couldn’t contain themselves and corn is up 0.94%, soybeans rose 1% and wheat was a relatively quiet 0.39% higher.
$1245 is the key level under my system – it is the fast moving average and as you can see gold hasn’t been able to break it yet but when it does gold will rally to $1265. I am still long.
Turning to the data in New Zealand today we get Electronic retail sales, in Japan the BSI large manufacturing index is released along with the tertiary index. In AUstralia we see the release of home loans and the NAB business confidence before Chinese Industrial production, retail sales and urban investment.
Tonight in Europe we see Italian and french industrial production, trade and IP in the UK, Italian GDP and we get a speech from Mrio Draghi, the ECB President. Will he channel his inner Glenn Stevens and rage against the Euro’s strength? He should. In the US the NFIB business optimism and Redbook indices are to be released.
Have a great day and good hunting