Stocks get a ramp into the close, Aussie higher, Euro pressured

April 15, 2014

There was a solid bid into the last hour of trade which left the US stock market looking healthier than it had been at 3pm Eastern. What drove the buying is difficult to know other than the real possibility that someone looking at the volume on the offer side of the market figured they could catch a few sellers on the hop and make a bit of money in the meantime.

Either way though the moves presage a better day ahead for Asian and Australian markets with the June SPI 200 contract 28 points higher in overnight futures trade.

What drove the US is still open to debate but my guess as stated above is that it was an opportunistic old style ramp because the strong result in US retail sales which beat expectations printing a 1.1% rise in March against the 0.08% expected were released much earlier in the day. Equally the Citibank result was positive but also known before 3pm.

Anyway at the close the Dow rose 146 points or 0.91% to 16,173. The Nasdaq rose 0.58% to 4,023 and the S&P 500 rose 15 points or 0.84% to 1,831.

In Europe the FTSE was up 0.34% as miners took the lead on Ukraine tensions to 6,584, the DAX was up 0.25% to 9,339 and the CAC rose 0.44% to 4,385. In Milan and Madrid stocks went in opposite directions with Italian shares up 0.55% while traders on the IBEX exchange took Spanish stocks down 0.17%.

In Asian trade yesterday things were fairly quiet given what might have happened after the weak US lead from last week with the Nikkei only losing 0.36% in a choppy day’s trade lead by the USDJPY rate and its ability to hold again at recent range lows. In Shanghai traders left stocks up just 0.07% after a fairly subdued days trading range while in Hong Kong stocks rose 0.15%.

On currency markets the better tone helped the Aussie dollar back above 94 cents to 0.9413 this morning. It is up on the crosses as well with USDJPY bouncing off support below 101.50 to sit at 101.83 this morning. The Aussie is also up against the Euro after more ECB governor comments about the operation of quantitative easing in Europe suggest the market is being softened up for a change in policy.

EURAUD weekly still biased lower

This morning Euro is at 1.3821, stronger than might be expected possibly after industrial production beat expectations in the EU with a 1.7% print in February.

A test of support seems likely

The Pound is at 1.6729.

On commodity markets gold is up on yesterdays open but did very little overnight and it sits at $1,325.70. Nymex crude is still relatively high at $103.51 while Dr Copper is unchanged at $3.07 lb. The Ags were all higher with corn and soybeans both up around 0.90% while wheat rose 2.8%.

On the data front today the market is still waiting on some semi-important Chinese data on foreign investment and new loans but locally all eyes will be on the RBA minutes from this month’s Board meeting which will be released at 11.30am AET. Key will be the discussion on the Aussie dollar.

Tonight we get UK CPI which is very important before the German and Eurowide ZEW economic surveys. Then the big one for the night in the US which is CPI for March. The market is looking for a lift to 1.5% year on year from 1.1% and a month on month result of just 0.1%. This data is key for thoughts on the Fed and by implication the US dollar.

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