Lets check out what happened in detail last night before the open of the local markets – remember to read Trading Week to always put this daily noise in context.
The European PMI’s disappointed strongly last night and were likely behind the falls on the Euro bourses. UK FTSE finished down 0.8% at 5846, the German DAX falling further, down 1.3% to 6891 points, below the important 7000 level.
The Euro (EUR/USD) was flat against the USD to remain at 1.3188, the USD Index up slightly to 79.7 due to no real moves in the majors and still in a dominant uptrend:
Trader’s will be watching the AUD like vultures today, as the Aussie is looking very weak indeed at the start of Asian trading, to be at 1.039 against the USD.
On the other side of the Atlantic, the US bourses were sold off as well, the S&P500 fell 0.7% to 1393 points as the Dow Jones Industrial Average declined 0.6% to 13,046 points.
On to the important debt markets, where US 10 year T-Notes rallied but came back a bit on the good jobless claims numbers, yields easing again to 2.28%, with German bonds (bunds) also bid up strongly, falling to a 1.91% yield. For reference, Aussie 10 year bonds were again bought back after recent sell offs, yields falling well below the cash rate (at 4.25%) to 4.19%
Has the recent bond selloff been nothing but a bond bear trap? I will look at this closely in Trading Week tomorrow morning.
To commodities, where the CRB Index fell over 1% to 312 points, the short term bearish head and shoulders pattern ominous on the daily chart:
Energies were sold off again, as WTI crude lost 1.7% a barrel to $105.43USD, whilst Brent crude lost 0.9% to $123.12USD per barrel.
Gold (in USD) had another eventual night losing 0.5% or $10 or so at $1642USD per ounce, hovering around critical support at the 200 day moving average and previous lows:
Base metals also fell last night. Copper was down 2%, lead 3.%, then aluminium -1.9%, zinc -1.7% and nickel -1.9% which should hit mining stocks today on the ASX.
On these relatively mixed leads the S&P/ASX200 index futures point to a much lower open, down around 30 points to open at 4240 points, wiping out yesterday’s gains and then some.
My Trading Day post will cover the Asian market session and the “ASX8” stocks after the close in the afternoon.
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