Macro Wrap
A relatively quiet night, with only a few data releases for markets to react to, or journalists to pin normal noise on. The release of the Bank of England (BOE) minutes caused a stir, with inflation – previously forecasted to fall back to 2% but now above 3.5% – mounting concern, particularly for those traders who wanted more liquidity from yet another central bank….
The following labour market report showed that wages had increased only 1.1% well below inflation, as purchasing power diminshes, even though headline unemployment eased to 8.3%. In the US mortgage applications showed a jump in refinancing – no surprise at least than 4% 30 year rates – whilst purchases dived off a cliff – falling 11% on expectations of a mild fall of only half a percent.
Market Update
Debt markets were relatively steady, with UK gilts the only major mover in Europe as bidders stepped to the plate on 10 year Spanish bonds again, whilst overall it was a run to safety (UK/German). But European stocks took back all and more of the gains of last night, with Spanish stocks falling 4% again. US stocks tried to climb this wall of worry, and basically just slipped.
See charts of all major markets at bottom of post.
Bonds:
- US 10 year Treasury gained slightly, yields rising 2 pips 1.97%
- German 10 year bunds also gained, yields falling 3 pips to 1.71%, UK 10 years sold off, losing 3 pips to 2.12%
- Spanish 10 year bonds yields fell 7pips to 5.76% whilst Italian 10 years were flat at 5.45%
Currencies:
- USD ended the night up again, the dollar index DXY gaining slightly to 79.58 points
- Euro fell slightly before recovering to 1.312
- AUD was sold off below 1.04 against the USD, coming back to 1.0354 where it remains at the start of Asian trading.
Equities:
- The broader Euro Stoxx 50 fell 1.66% to 2327 points
- The FTSE 100 slipped 0.4% to 5745, whilst German DAX lost 1% to 6732 points
- The FTSE MIB Italian was a big loser alongside the Spanish IBEX, down 2.4%, the latter down 4%, both because of their banks….
- The S&P 500 closed down 0.4% at 1385, the Dow Jones Industrial Average lost 0.6% to 13032, the NASDAQ 100 slipping a few points to 2716 points
Commodities:
- The CRB Index has now fallen below 300 points, since reaching almost 330 points in late February – mainly due to soft commodities:
- Oil prices were back on track together again with ICE Brent down 0.5% to $118 per barrel – with NYMEX WTI crude falling 1.4% to $102.67 USD per barrel, whilst natural gas remained flat at $1.95, fallen 34% YTD
- Gold (USD) was eventually steady, settling at $1642USD an ounce as we wait the start of the Asian session
- Iron ore import prices into China were off slightly, losing 70 cents at $US 148.5 per metric tonne, still on a tear from the October 2011 low:
Today in Asia
- As Asia wakes up the ASX200 futures are pointing to a flat to slightly lower open, at around 4345 points.
- Data today locally includes the release of New Zealand CPI numbers and NAB Business Confidence. Regionally, Japanese merchanise trade numbers in the afternoon. 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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