Macro Morning

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Macro Wrap

World markets seem enamored with one company and one man alone at the moment – Apple (AAPL) and Fed Reserve Chairman Ben Bernanke (The Bernank). The former beat estimates – resoundedly,almost double – and soared nearly $50 a share overnight, lifting all US bourses (except the Dow, which was up modestly). The Bernank reiterated in a press conference that the Fed would do anything necessary to boost the economy, but it doesn’t need boosting right now, so the only thing forthcoming is continued low interest rates til 2014.

Maybe he didn’t look at the durable goods orders that came out, down 4.2% on the month, and well below consensus, putting a damper on headline GDP growth:

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Non bubble stocks continue to report good earnings in the US though, although estimates have been subdued. In Euroland, debt markets were subdued as peripheral debt recovered, and risk was on stocks, so bunds and gilts were sold off, although GDP print for the UK showed a continued contraction in the Mother Country’s (sic) economy, in a technical recession.

The ANZAC day break means Australian markets should open with a big push this morning – with the ASX200 looking like opening at or above 4400 points with some heat likely to come out of the bond market as a result, with 10 year yields near record lows.

See charts of all major markets at bottom of post. 

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Bonds:

  • US 10 year Treasuries were steady, yields gaining just 1 pip to 1.98%
  • German 10 year bunds were sold off, yields rising 4 pips to 1.73%, UK 10 years moving the same, yields rising 4 pips to 2.13%
  • Spanish 10 year bonds and Italian 10 years continue to recover, with yields falling 6 and 3 pips to 5.75% and 5.61% respectively

Currencies:

  • USD was sold off against all major currencies, the dollar index DXY falling to 79.08 points, looking weak here:
  • Euro recovered above 1.32 whilst the AUD followed, throwing off its reaction to domestic deflation and lower rates, now back above 1.035 at 1.0363 at the start of Asian trading.

Equities:

  • The broader Euro Stoxx 50  gained 1.7% to 2322 points
  • The FTSE 100 finished flat at 5719 whilst the German DAX was up 1.7% to 6704 points, recovering some of its mojo
  • The US bourses were the real movers, the S&P 500 closing up 1.4%, the Dow Jones Industrial Average up only 0.7%, whilst the NASDAQ 100 soared, up 2.6%, now up an incredible 16% for the year to date, all because of AAPL:

Commodities:

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  • The CRB Index remains slightly above 300 points again, at 302, trying to find a bottom as oil prices were bid up slightly, ICE Brent up 0.8% at $119.10 per barrel and NYMEX WTI crude up 0.4% to $104.02 USD per barrel, whilst natural gas surged again – up over 5% to $2.08, putting on nearly 10% since its “bottom” a week ago:
  • Gold (USD) was eventually steady again at $1644USD, with silver also not moving, at $30.72 an ounce
  • Iron ore import prices into China were unchanged in USD, after dipping over the ANZAC break, now at $US 146.70 per metric tonne, still recovering from its October 2011 low

Today in Asia

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

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