Equity markets in Europe slipped last night before regaining ground as positive US data buoyed the broader US bourses, as unemployment claims fell, housing starts rose and manufacturing data improved. Successful debt auctions in Europe also helped offset the continued nervousness around the Greek bailout deal, which is delayed again. Not all risk assets have responded in similar magnitude, so let’s have a closer look at what happened last night in detail:
The UK FTSE finished flat at 5885, after being down more than 1% for most of the session, and is still above its resistance level at 5700 points with the German DAX also recovering to be down only 6 points – flat – to 6751 points.
The Euro (EUR/USD) was boisterous to say the least, falling below 1.30, rising above 1.31 to finally be at 1.313 against the USD, rising slightly this morning, as the USD Index after showing some strength slipped around 0.3 points to 79.45, not adding weight to a risk-off correction, but not confirming a continuation of USD weakness.
The resilient AUD jumped again, rising above 1.075 where it remains in early trade this morning, with Aussie 10 year bonds sold off ever so slightly, yields gaining to be at exactly 4% and still below the cash rate.
US markets shot out of the gate on the positive data flow, all finishing up 1% or more, with the S&P500 Index up 1.1% to 1358 points at a nine month high, the narrower Dow Jones up just below 1% to 12904 points and the tech heavy NASDAQ Composite the strongest again, up 1.5% to 2959.
To commodities, and as I said previously – watch WTI crude – the light sweet oil is now above $102USD a barrel on spot prices, not good news for US consumers with Brent crude also rising in kind, up over $1 to be above $119 on the 3 month futures.
Gold had another very volatile session with more than a $25 range, plummeting in the London session before rising over $20 to be just below $1730USD an ounce, where it remains on the open of the Asian session.
The Aussie SPI Futures are pointing to a fairly strong open for the S&P/ASX200 index, probably up 33 points around the 4215 points level on these mixed, but strong US leads.
Earnings reports are slowing down a little today but still sturdy – with ANZ reporting quarterly results, Billabong – currently in trading halt possibly announcing a private equity deal, Duet Group, Santos, Sims Metal and Spotless the major ASX200 companies announcing interim results, which I’ll cover later today.
Trading Day will cover the Asian market session and the “ASX8” stocks after the close in the afternoon.