Macro Wrap
It was looking like a shaky night on world markets again last night, but a key data release saved the day! Spanish debt raced off sharply, with the 10 year yield quickly surpassing 6%, before the release of EU Trade figures, which showed an uptick, although Italian trade again faltered. It was US retail sales which surprised strongly – economists expected a 0.3% rise and markets were shocked by a 0.8% rise for March – almost triple!
The Empire State Manufacturing survey came next, which came well under expectations at 6.5 with consensus at 18 points, which took some wind out of sails.
In other macro news, the Chinese central bank noted that daily trading range of its controlled currency, the yuan, will be doubled to plus or minus 1 percent from current 0.5%, in another move designed to encourage more liquidity in the worlds 2nd (soon to be 1st?) largest economy.
Market Update
Markets began the Euro session down, particularly peripheral bonds before the datasets saw them recover to finish in the green, including a sharp rally in the Euro (see chart below). US stocks, with corporate earnings starting up again, finished flat, with banks helping balance the ledger. Bubble stock Apple fell over 4% to be well below $600 a share, losing nearly 10% from its top. Google was down 3% as technology shares – namely the NASDAQ 100 – fell sharply.
See charts of all major markets at bottom of post.
Bonds:
- US 10 year Treasury were stable, yields remaining at 1.98%
- German 10 year bunds strengthen slightly, yields falling 2 pips to 1.71%
- Spanish 10 year bonds were sold off strongly again, with yields gaining 7 pips to 6.01% whilst Italian 10 years similar, up 6 pips to 5.56%
- Australian 10 year government bonds remain steady at 3.79%
Currencies:
- King USD was up to begin with before the Euro rallied, with the dollar index DXY down 0.3 at 79.53 points
- Euro fell to 1.30 even before snapping back to 1.314:
AUD was also sold off before recovering to 1.035 where it remains at the start of Asian trading.
Equities:
- The broader Euro Stoxx 50 up 0.4% to 2301 points
- The FTSE 100 gained 0.25% to 5666, whilst German DAX was up 0.6% to 6625 points
- The FTSE MIB Italian finally put runs on the board, up 0.3% to 14411, whilst the Spanish IBEX35 was 0.5%, down 16% for the year
- US markets were flat, with the S&P 500 at 1370, the Dow Jones Industrial Average gaining 0.5% to 12921, the NASDAQ 100 off 1% to 2670 points
- Apple (AAPL) fell sharply again down 4% or $25 a share to $580
Commodities:
- Oil prices were very mixed with ICE Brent down by $2.79 a barrel to $118.42 per barrel – with NYMEX WTI crude steady at $102.93USD per barrel, whilst natural gas was up 1.7% to be above $2 again having fallen 32% YTD
- Gold (USD) fell to begin with before recovering, settling at $1652USD an ounce as we wait the start of the Asian session, with silver also flat at $31.52 an ounce, and base metals on the London Metals Exchange were mixed, with copper touching a 3 month low
- Iron ore import prices into China were off very slightly at $US 149.3 per metric tonne
Today in Asia
- As Asia wakes up to the risk-off story the ASX200 futures are pointing to a flat open with the index likely to open at 4300 points.
- Data today locally includes the release of the April monetary policy minutes from the RBA followed by motor vehicle sales for March, along with production reports from Rio Tinto and Fortescue Metals. Regionally, there’s nothing else until the Euro markets tonight. 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 |
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