Market Morning

Advertisement

Markets had a spate of bad news (European services contracting, Chinese economic growth target shifted) that was barely offset by very good news from the US (service industry expanding) – although Federal Reserve Dallas President Richard Fisher said more bond buying was risky. No milky wilkie?

Here’s what happened in detail – remember to read my weekly update first to put this in context:

The UK FTSE slipped alongside the German DAX, both failing to break resistance barriers set by this liquidity led (LTRO) equity rally, at 5950 and 6950 points respectively.

Advertisement

The Euro (EUR/USD) was basically unchanged, remaining just above 1.321 where it is currently trading this morning, as most currencies were stable against the USD, the USD Index nudged slightly lower to 79.3 points, consolidating below temporary resistance:

Remember, the USD is actually in an intermediate uptrend, not in a moribund state as most would suggest. What was interesting over night was the move in AUD pairs. First against the USD, the commodity proxy slipped below 1.07 and is courting its support area, as suggested by my FX colleague Deus Forex Machina earlier:

Candlesticks: blue means positive day, red means negative, with "tails" above and below showing highs and lows for the day

Interestingly, in a pair that doesnt get a lot of attention, the Aussie is rising against the Kiwi (NZD), possibly due to our cousins economic troubles exarcebated by a possible blow-out in the deficit:

Breakout of Aussie against Kiwi - good for expats sending money back home?

Moving to the other side of the Atlantic, the US bourses all fell, the NASDAQ Composite by almost 1%, mainly because of Apple (AAPL) falling well over 2% .The S&P500 closed down 4 points or 0.3%, failing again to break its former resistance level:

A peek (peak?) above former high a bull trap or a rest?

On to the arguably more important debt markets, with minor sell-offs in US 10 year T-Notes,  staying above 2% yield at 2.01%, German bonds (bunds) slipping with yields rising to 1.83% yield and for reference, Aussie 10 year bonds gaining, with yields back down to 4.03% – probably in anticipation of today’s RBA Board meeting.

To commodities, where energies were mixed with WTI crude finishing flat at $106.70 a barrel, whilst Brent crude moved around $0.50 higher, above $124USD on the 3 month futures. Keep an eye on this, particularly Brent, which is near record highs priced in Euro.

Gold fell below $1700USD an ounce overnight but has recovered, finishing flat before the start of Asian session at $1706USD an ounce. The short term chart is not yet conclusive of a move, but the shiny metal does seem to be weakening (lower lows), and look at that strong resistance at $1800USD an ounce:

The S&P/ASX200 index futures pointed to a 10-15 points lower open on these very weak leads, and the market has done so, falling on the open to around the 4245 points level.

My Trading Day post will cover the Asian market session and the “ASX8” stocks after the close in the afternoon.

www.twitter.com/ThePrinceMB

Disclaimer: The content on this blog should not be taken as investment advice. All site content, including advertisements, shall not be construed as a recommendation, no matter how much it seems to make sense, to buy or sell any security or financial instrument, or to participate in any particular trading or investment strategy. The author has no position in any company or advertiser reference unless explicitly specified. Any action that you take as a result of information, analysis, or advertisement on this site is ultimately your responsibility. Consult someone who claims to have a qualification before making any investment decisions.