Note: Market Morning is an update on overnight markets that was previously performed late in the afternoon in the “Trading Day” post. This will be more timely and provide our readers with an overview before the Asian risk markets open.
Risk markets fell overnight, most likely due to the comments by ECB President Mario Draghi and the fallout from the power change in North Korea due to the death of Kim Jong Il.
In Europe, the UK FTSE slipped 0.4%, down 22 points to 5364 points, whilst the German DAX was dragged down 0.5% to 5670 points, oscillating around its short term support area. In the after hours futures markets, both markets are following the US trade, down around half a percent.
The Euro (EUR/USD) fell almost half a percent, to below 1.30 against the USD and is currently trading at 1.2998, as the USD Index continues to strengthen, now setting a new one year high, currently at 80.925 points:
The US equity markets followed the European lead with the banking sector falling sharply in particular. The S&P500 closed down 1.1% to 1205 points, the tech heavy NASDAQ was down slightly more, off 1.2% to 2523 and the Dow Jones losing 100 points exactly to 11766. Bank of America fell nearly 5% alongside Citicorp and JPMorgan Chase losing more than 4% of market value.
The AUD fell almost a cent against the USD, after proving resilient yesterday, and is currently trading at 98.88, whilst WTI crude regained some of yesterday’s losses and is currently trading at $93.63 USD a barrel. Brent crude remains above $100 USD a barrel, also undergoing light trading in the Christmas week, now at $103.37 a barrel.
The CRB (commodities) Index was barely up, and remains in a dominant downtrend, having broken support, seemingly heading back to its pre-QE2 levels:
Gold slipped and remains under $1600 USD an ounce at $1593 on the spot market before the opening of the Asian session, and also remains under its long term trendline.
The SPI Futures point to a flat open for the S&P/ASX200 index, with eyes on the Chinese bid for Gloucester Coal probably taking the pain away from the retail sector for now.