Markets had a mixed session on Friday night, with European bourses reacting positively to the raising of the bailout “firewall” to 800 billion Euros, whilst US markets swallowed mixed data. The news de jeure (or de weekend) was the release of official PMI statistics in China, which showed manufacturing is improving, contrary to the “flash” HSBC data released previously.
This has buoyed risk markets going into the Asian open this morning. Before we have a look at what to expect, let’s have a look at the details of what happened on Friday night.
Remember to read my weekly analysis of all major macro markets in Trading Week to put this daily noise in context.
The UK FTSE closed 0.5% higher to 5768 points, the German DAX catching up again and then some, rising 1% to be just under the important 7000 level at 6947 points.
The Euro (EUR/USD) was up slightly, at 1.3369 against the USD, whilst the AUD fell slightly throughout the session, finishing just above 1.034 on the spot market. However, as you can see from the chart below, on resumption of trading this morning in Asia, it has shot up 1 cent to 1.044 against the USD:
As a result, the USD Index is off slightly, down to 78.8 points and remaining above its critical support level at 78 points.
On the other side of the Atlantic, the US bourses were flat with the S&P500 rising 0.4% to 1408 points whilst the Dow Jones Industrial Average did the same up 0.5% to 13212 points.
Apple (AAPL) fell over 1%, falling below $600 a share and looks “toppy”:
On to the important debt markets, where US 10 year T-Notes were sold off slightly, yields gaining by 5 pips to 2.21% yield whilst German bunds strengthened again, down 1 pips to 1.79% yield. Aussies remain volatile, yields falling slightly to 4.06% as traders and economists (definitely not repeating myself there) wait for the RBA on Tuesday.
To commodities and as I said in Trading Week on Saturday, the CRB Index is still weak, moving sideways for now. However, it gained nearly 1% on Friday, to be just over 308 points, but still below the “neckline” at 311 points that it broke earlier in the week. The Chinese surprise may turn this into a bear trap:
In energies, crude futures were flat, nothing much to report here.Brent was off 70 cents to $123.67USD a barrel with WTI up slightly to $103.02 USD per barrel. Still quite high, and still one (two) to watch in week(s) ahead.
Gold (in USD) had a bullish night, gaining to $1668 an ounce and is building on those gains at the start of session here in Asia:
On these good leads the S&P/ASX200 index futures are up strongly – almost 40 points or nearly 1% to open probably around 4380 points. The breakout continues, however, the New Zealand NXZ50 has opened down 0.2% on the Chinese news – although this could be because of local confidence data coming out the wrong way (i.e down) so its a small mixed lead for how the Asian session will go.
There is important local data today, with building approvals and commodity price data from the RBA, as rates speculation continues…
My Trading Day post will cover the Asian market session and the “ASX8” stocks after the close in the afternoon.
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