We normally end with the data but lets start there today because there are so many important releases over the next 24 hours and as such so many potential catalysts for trade it is worth noting what they are.
Opening the batting in Japan is a raft of outturns starting with the Nomura manufacturing PMI, industrial and vehicle production, housing starts and construction orders. But the key release will be the BoJ’s interest rate decision and statement. Australia has private sector credit but that won’t so much but Europe and the US are huge as well.
German retail sales will be keenly watched tonight along with the unemployment rate. CPI data in Italy will be important along with EU wide CPI in driving expectations about the ECB. Then of course we have US GDP and the FOMC decision which will cap off what is a huge day of data in the Northern hemisphere.
Looking at the above it is the Euro that is in the spotlight and yesterday’s down move is a sign that the 1 year uptrend line we discussed yesterday is soon to be tested.
1.3750 remains the key level to watch with 1.3660/65 support below that on the weeklies. A break of the lower level would be decisive but remember we always respect the trendline (1.3750) unless or until it breaks.
Turning to overnight moves and its impact on today then after a poor day’s trade yesterday on the ASX Australian traders are likely to have a better day today after US and European markets rose overnight. indications at 7.25am this morning are that the ASX will open up 23 points with the June SPI 200 contract at 5498 bid.
It was a difficult night to get your arms around the drivers of the positivity. Ukraine tensions are rising but no one cares so it seems to be a number of incremental factors including slightly lower German CPI (-0.2% Mom April and 1.3% YoY) suggesting that the ECB will be edging closer to quantitative easing which helped in Europe as did the weaker than expected consumer sentiment and business climate in the EU. UK GDP also came in slighthly weaker at 3.2% year on year and 0.8% on the quarter leading many commentators to say the Bank of England has the economy in a “sweet spot” with no need to raise rates.
So at the close European stocks were higher across the board. The FTSE rose 1.04% to 6,770, the DAX is up 1.46% to 9,584 while the CAC is 0.84% to 4,498. In Milan and Madrid were up 2.15% and 1.36% respectively.
In the US it was a mixed night on an individual share basis. twitter is getting hammered on its results, luxury goods maker Coach did the same but Merck was higher on its results. Data in the US wasn’t materially different from expectations with Case Shiller home price rises moderating to 12.9% annual rate from 13.2% last month.
In the end though the Dow rose 0.53% to 16,535, the Nasdaq was 0.72% to 4,104 and the S&P regained 9 points or 0.48% to 1,878. Worth noting is that noted investment letter writer Dennis Gartman is now flat stocks as he sees the risks to the downside from here.
On currency markets forex traders have knocked the Euro a little lower to 1.3809 from a day’s high of 1.3878. The Pound liked the fact that GDP didn’t miss by much and it is up at 1.6825 while the USDJPY is still range bound. Looking at the Aussie it found support at the trendline from this years low and sits at 0.9268 off a low of 0.9225 yesterday.
Crude and Gold were a bit dull closing at $100.79 Bbl and $1,294.80 respectively but the fall of 5 cents in copper to $3.07 lb certainly is worth noting. On the Ags it was back to the usual decent moves with corn up 1.53%, wheat rose 1.11% and soybeans were 0.94% higher.
Please note: I had a brain fade yesterday and wrote the Aussie fell but the bulls were in control. Clearly an inexplicably stupid sentence – apologies, it slipped through my editing.
Have a great day