Stocks rise on consumer optimism, Aussie pushing higher still

March 26, 2014

The US stock market and the Aussie dollar continue to confound those who think they should fall and that was the case again overnight.

On the data front US consumer confidence rose to 82.3 which was much better than expected and also a six year high for the conference board measure while the Case Shiller home price index was a little weaker at 13.2% year on year and new home sales printed 440,000 units in feb down a little on the 445,000 expected.

So with 45 minutes before the close of trade the Dow is up 95 points or 0.59%, the Nasdaq is up 0.06% and the S&P 500 is up 7 points to 1865 for a 0.35% gain.

European shares ignored the weaker than expected German Ifo data (110.7 for climate and 106.4 for expectations) and rose strongly with miners like BHP and Rio doing well in UK trade. At the close the FTSE was up 1.3%, the DAX rose 1.62% while the CAC was 1.58% higher. In Spain the IBEX 35 was more subdued rising 0.79% while in Milan stocks closed up 0.95%.

Locally the ASX SPI 200 June contract in overnight trade has risen 21 points to 5359 bid.

Worth noting, although it hasn’t had any impact on overnight trade or the Aussie dollar is yesterday’s fears about the collapse of a small Chinese bank.

On FX markets the Euro sits at 1.3802 down a little while Sterling is back above 1.65 up 0.15%. USDJPY is at 102.28 while the Aussie is the major winner as it just keeps on keeping on up at 0.9171 this morning. The RBA won’t like this move but there seems not much they can do about it.

The Aussie dollar continues to confound the critics, the RBA and the weight of expectations by not falling. Indeed it has not only not fallen it is rising again with an overnight high of 0.9173.

As you can see in the chart above for the first time in almost a year the Aussie is above the 200 day moving average.

While the overhead resistance is also obvious from the trend line that is a fairly positive sign if sustained and while the US dollar continues to struggle on some weak data in Australia or some RBA intervention – verbal or otherwise – can really impact the Aussie.

On commodity markets copper was the big gainer overnight up 6 cents a pound to $2.05 for a 2% rise. Nymex crude was largely unchanged at $99.50 Bbl while gold sits back in the doldrums at $1312.90 oz. On the Ags corn fell 0.92%, wheat fell 0.59% and soybeans were 0.16% higher.

On the data front today it is once again very quiet but RBA Governor Stevens is talking tonight. Gfk consumer confidence is out in Germany tonight before mortgage applications and Durable goods in the US.

I’m Still in New Zealand so we’ll be back to normal tomorrow when I get home.

Have a great day and good hunting

Greg

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