Macro Re-cap
The risk markets were slammed hard last night as the debt crisis in Europe emanating now from Spain and slow pace in US earnings gave investors little hope. The only market moving data was US wholesale trade for February, which surprised on the upside slightly, whilst Redbook retail sales – whilst positive, slipped below consensus.
Markets Update
It was Spanish and Italian bonds – btw these nations are SLIGHTLY bigger than Greece Mr Pascoe – that gave off the tremors last night. US stocks have now declined over 4.3% since reaching a four year high on April 2. The VIX – something to watch I recall mentioning in Trading Week – rose nearly 9 percent overnight.
See charts of all major markets at bottom of post.
Bonds:
- US 10 year Treasury yields slipped 6 pips to be at 1.98% – no end of bond bubble in sight
- German 10 year bunds were rushed at – losing 9 pips to 1.64% – why?
- Spanish 10 year bonds were hammered – gaining 21 pips to nearly 6% at 5.94%
- Italian 10 years were similarly sold off – gaining 23 pips to 5.66%
- Australian 10 year government bonds were steady after being bid up all day yesterday, yielding only 3.88%. Wow.
Currencies:
- King USD was up slightly and remains strong, the dollar index at 7986 points
- Euro slipped to 1.308 and continues to look weak
- AUD was s0ld off nearly half a cent, now at 1.0255 against the USD where it remains at the start of Asian trading.
Equities:
- Most European bourses were assaulted – and I mean assaulted – with the broader Euro Stoxx 50 down nearly 3% at 2321 points
- The FTSE 100 lost 2.2% to 5595, and apart from the Swiss exchange was the best performer!
- German DAX lost 2.5% to 6606 points to remain well below the important 7000 point barrier
- The FTSE MIB Italian bourse was the biggest loser, mainly because of financials, losing nearly 5% to 14458
- Spanish and French markets lost 3%
- US markets fell overall, but not as bad as the EZ, with the S&P 500 closing 1.7% lower at 1358, the Dow Jones Industrial Average down 1.6% to 12715
- Apple (AAPL) finally had a bad day – down over 1% or $7.79 to $628 a share
Commodities:
- Oil prices came off sharply with economic growth concerns, with ICE Brent futures falling $3 a barrel or 2.45% to $119.66 per barrel – teetering on its price support level as I mentioned in Trading Week:
- NYMEX WTI crude was off only 1.5% to $100.90USD per barrel, whilst natural gas lost nearly 4% to be just over $2, having fallen 32% YTD
- Copper and Aluminium on the LME were flat or slightly up
- Gold (USD) had a relatively calm night amongst this stoush, and is steady at $1660USD an ounce as we wait the start of the Asian session, probably on expectation that more QE/LTRO/3LA monetary policy is required to paper over more cracks in the global credit system. Is there a gold/equities divergence occurring? Mmm.
Today in Asia
- As Asia wakes up to the bad news and red screens the ASX200 futures are pointing to a much lower open – down around 50 points or 1.2% to 4240 points.
- Data today includes the all-important home loan/credit data, with Japanese machinery orders only Asian data of note, whilst tonight sees a smattering of European and US data, with the Fed Beige Book only standout. Click here for our economic calendar.
Market Charts
| AUD_USD | EUR_USD |
| US DOLLAR INDEX | GOLD USD |
| S&P500 | VIX VOLATILITY |
| DAX 30 | SPOT BRENT CRUDE |
| RJ/CRB COMMODITY INDEX | CHINA IMPORT IRON ORE |
Sovereign 10 year bond yields
| UK | USA |
| JAPAN | |
| GREECE | IRELAND |
| SPAIN | ITALY |
| FRANCE | GERMANY |
| PORTUGAL | AUSTRALIA |
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