The fallout continues from the slowdown in Chinese growth and a rise in fuel prices, well that’s what the news flow gives reason to the falls/dips/bumps in risk markets overnight. The only major data to move the market was UK inflation (covered here) and US housing starts (which I’ll look at later this morning).
Lets check out what happened in detail before the open of the local markets – remember to read Trading Week to always put this daily noise in context.
Europe was the strongest sell off, both major bourses losing over 1%, with UK FTSE down 1.2% to 5891, the German DAX falling further, down 1.4% to 7054 points. Both bourses are sitting around their resistance levels, will PMI’s later this week force a stronger move?
The Euro (EUR/USD) was flat against the USD to remain at 1.322, the USD Index 0.2% higher at 79.6 mainly because of the Aussie. The AUD fell sharply on the ‘off-China’ news flow, falling well below 1.05 to be at 1.048 against the USD at the start of Asian trading. Here’s last night’s intraday chart showing the selloff:
On the other side of the Atlantic, the US bourses were also sold off, but not as much, and no surprise, Apple (AAPL) gained to be just below $606 a share. The S&P500 fell 0.3% to 1405 points as the Dow Jones Industrial Average fell slightly more, down 0.5% to 13,170 points.
On to the important debt markets, where US 10 year T-Notes were bid up slightly for a change, yields easing to 2.36%, with German bonds (bunds) also bid up, falling to a 2.04% yield. For reference, and in contrast, Aussie 10 year bonds were sold off, yields slipping to 4.28% – continuing just above the cash rate (at 4.25%)
To commodities, where the CRB Index followed the risk off move, falling 1.2% to 315 points and forming a short term bearish head and shoulders pattern on the daily chart:
Energies were bid up on the cash markets, but futures came off as the Saudis announced possible production increases, as WTI crude put on $1 a barrel to $108USD, whilst Brent crude gained $1.40 to $125.6USD per barrel.
Gold (in USD) had another volatile night (and makes me hanker for the days/nights when I used to day trade the shiny “currency”) before recovering in NYMEX trade to end the night where it started at end of the Asian session up at $1649USD per ounce.
On these relatively bad leads the S&P/ASX200 index futures point to a lower open, down around 18 points to probably open around 4250 or so.
My Trading Day post will cover the Asian market session and the “ASX8” stocks after the close in the afternoon.
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