Macro Wrap
It was a weak dataflow on Friday night, with no US data, but the Germans gave a boost to risk markets, with their closely followed IFO survey showing renewed confidence in the German economy. On reaction European stocks climbed over 1% whilst the US session was subdued, with Apple falling putting a damper on the sesseion. In other major news, the IMF announced a nearly half trillion bailout package as another stopgap in a long secular deleveraging trend (and this money is borrowed).
What’s going to happen on the open this morning? The local market looks like gaining a few points and opening around 4370, with local data limited to producer price index figures and Chinese flash PMI.
See charts of all major markets at bottom of post.
Bonds:
- US 10 year Treasuries were steady, yields remaining at 1.96%
- German 10 year bunds were off, yields rising 2 pips to 1.71%, UK 10 years sold off as well gaining 2 pips to 2.17%
- Spanish 10 year bonds and Italian 10 years were both mildly sold off, yields rising 5 pips each to 5.9% and 5.63% respectively%
Currencies:
- USD was sold off slightly, the dollar index DXY falling very slightly to 79.19 points, mainly because of Euro and Pound sterling
- Euro rose to above 1.32 before recovering to 1.3219
- AUD also saw a bigger bid against the USD, finishing at 1.0385 but has come back to 1.037 at the start of Asian trading.
Equities:
- The broader Euro Stoxx 50 rose 1.1% to 2311points
- The FTSE 100 finished up 0.5% whilst German DAX gained over 1%
- The FTSE MIB Italian was also up 1%, trying to recover its sharp losses recently the Spanish IBEX,gained nearly 2%
- The S&P 500 closed flat, up only 0.1%, the Dow Jones Industrial Average rose 0.5%, the NASDAQ 100 falling 0.2% mainly because of Apple (AAPL) losing nearly $20 per share again, or 2.4% overnight, after a recent dead cat bounce
Commodities:
- The CRB Index pipped above 300 points, but remains weak
- Oil prices rose on Friday with ICE Brent up 78c at $118.78 per barrel and NYMEX WTI crude the same, up 76c to $103.05 USD per barrel, whilst natural gas was up 1% to $1.92
- Gold (USD) was eventually steady, after oscillating between $1640 and $1645 all night, settling at $1642USD an ounce – again – as we wait the start of the Asian session
- Iron ore import prices into China were unchanged at $US 148.4 per metric tonne, still on a tear from the October 2011 low
Today in Asia
- Data today locally includes the release of Producer price index. Regionally, Chinese Flash PMI is relased. Click here for our economic calendar.
Market Charts
| AUD_USD | EUR_USD |
| US DOLLAR INDEX | GOLD USD |
| S&P500 | VIX VOLATILITY |
| DAX 30 | SPOT BRENT CRUDE |
| RJ/CRB COMMODITY INDEX | CHINA IMPORT IRON ORE |
Sovereign 10 year bond yields
| UK | USA | ||||||||
|
JAPAN | GREECE | IRELAND | SPAIN | ITALY | FRANCE | GERMANY | PORTUGAL | AUSTRALIA |
|