Risk markets were buoyed last night by the confirmation of the “soft landing = stimulus coming” meme embedded in the Chinese GDP print, where the Shanghai Composite eventually closing up more than 4%, with a successful Spanish debt auction helping Euro markets. US markets then played catch up (for once) reacting positively to the very good Empire manufacturing index results (chart) but slipped due to disappointing financials results (read: Citigroup), as the earnings season rolls on.
In detail:
The UK FTSE put on 37 points or 0.6% to finish at 5694 points, just below its resistance level at 5700 points and looking bullish. The German DAX jumped again, up 1.8% or 112 points to 6332 to finally close above its 200 day moving average (the closest watched technical level), but still below resistance at the October rebound rally high:
The Euro (EUR/USD) was up, currently trading at 1.2735, as the USD Index fell 0.43 points, as all major undollar currencies ralled against the “toilet paper” standard, currently at 81.35, still on trend (the level to watch here is 79.6, with a break of the uptrend since the October low, marked in green, as a bearish sign):
US markets opened after the long weekend, with the broader S&P500 Index up 5 points, or 0.3% to 1294 points back to its Thursday high and still just above resistance, with volume slowly building. The Dow Jones did slightly better, up 60 points or 0.5% to 12482 points and continuing to gain momentum – a close above 12800 points would signal a new bear market rally.
The AUD strengthened, as portfolio managers continue to believe the decoupling meme for the commodity currency, and was bid up over 1 cent against the USD, but has come back a bit, currently trading at 1.0375, while it remained above 81 cents against the Euro, now at 81.57 cents.
To commodities, and WTI crude, rallied, bid up nearly 2% or almost $2 a barrel to be above $100 a barrel whilst gold saw some strong bids in the London session, almost breaching $1670USD an ounce before selling off into the NYMEX session and currently at $1651USD an ounce, waiting for the open of the Asian session:
Silver followed its shiny brother, rising then falling to be just above $30USD per ounce on the spot markets whilst other metal commodities were extremely bullish (as happens when your No.1 (or only) customer is bullish). Aluminium put on over 2.5% to almost $1 per lb, copper up 1.3% building on its breakout – looking like heading for $4USD a lb – and nickel was flat, only up 0.3% on the London metals market (LME).
The Aussie SPI Futures actually point to a flat open for the S&P/ASX200 index, probably opening around the 4205 points level, even with these positive leads (particularly commodities). Vehicle sales and consumer sentiment data (see here for full weekly list) might shake things up a bit
Trading Day will cover the Asian market session and the “ASX8” stocks after the close in the afternoon.