Macro Morning

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Macro Wrap

Debt markets were anxious last night, as the Spanish government sold two tranches of bonds, which turned out to be “successful”. Demand was high, but asking yields were raised to 5.74% for 10 year debt, higher than the January 5.4% average. On reaction European stocks climbed until the US session, when two datasets missed causing US stocks to fall, Treasuries to gain and commodities generally unchanged.

Weekly jobless claims in the US missed again, completely outside the consensus range – with last week’s number revised up. The 4 week moving average is ticking up again. The closely watched US Philly Fed survey missed expectations, although positive at 8.5 in April, this is a sharp drop from the 12 surveyed in March and now a 3 month low. Existing home sales also missed consensus again, down 2.6% over the month, but still up over the year.

See charts of all major markets at bottom of post. 

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Bonds:

  • US 10 year Treasuries gained slightly, yields at 1.96%
  • German 10 year bunds also gained, yields falling 3 pips to 1.69%, UK 10 years sold off gain losing 2 pips to 2.14%
  • Spanish 10 year bonds were sold off strongly following the debt auction with yields rising 10 pips to 5.86% whilst Italian 10 years were up more, yields rising 13 pips to 5.58%

Currencies:

  • USD remained strong, the dollar index DXY gaining very slightly to 79.57 points
  • Euro fell below 1.31 again before recovering – again – to 1.313
  • AUD was sold off against the USD, falling from 1.0385 before coming back to 1.0335 where it remains at the start of Asian trading.

Equities:

  • The broader Euro Stoxx 50  fell 1.85% to 2284 points
  • The FTSE 100 finished flat at 5744, whilst German DAX lost nearly 1% to 6671 points, still up 13% year to date, but coming off a nearly 18% gain
  •  INSERT CHART
  • The FTSE MIB Italian was a loser again alongside the Spanish IBEX,both down over 2%, both because of their banks….
  • The S&P 500 closed down 0.5% at 1376, the Dow Jones Industrial Average lost 0.5% to 12964, the NASDAQ 100 falling 1% to 2686 mainly because of Apple (AAPL) losing over $20 per share, or 3% overnight, after a recent dead cat bounce

Commodities:

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  • The CRB Index remain below 300 points, since reaching almost 330 points in late February – mainly due to soft commodities:
  • Oil prices were back on track and steady with ICE Brent flat at $118 per barrel and NYMEX WTI crude up 0.3% to $102.60 USD per barrel, whilst natural gas fell over 2% to $1.90, fallen 36% YTD
  • Gold (USD) was eventually steady, 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 148.5 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 4355 points.
  • Data today locally includes the release of ABS Import/Export prices. Regionally, Japanese tertiary index (a measure of non-manufacuturing) are 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

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