by Chris Becker
Macro Wrap
Cats were a bouncing on risk markets last night as the oversold conditions from the previous week melee reversed amidst no data releases, just platitudes and niceties from European and Chinese officials. Premier Wen Jiabao was talking up possible government stimulus, whilst French and German finance ministers repeated their ” we will do what it takes to keep our debt, err, Greece, in the Euro.” For an insight into why the former is unlikely to be a repeat of the bailout of Australia’s economy in 2009, read this at interest.co.nz
Weakness in the USD saw crude oil rising swiftly, although gold and other precious metals were flat, US equity markets were all up over 1% or more, whilst European bourses were also in the green, but less ebullient.
Facebook had few friends, falling 11% intraday to $33, below its IPO support level of $38 per share, and closed just above $34 per share, with increased volume failing to arrest the decline:
Bonds:
- US 10 year Treasuries yields came up again as risk came on, but still at near record lows at 1.74%. German 10 year bunds were sold off slightly whereas UK 10 Gilts reversed their recent gains, yields rising 2 points to 1.84%
- Spain and Italy yields were basically steady, with the latter even seeing some bids and rising.
Currencies:
- The US Dollar (in USD index terms) slipped 0.34 to be just below 81 points, but not because of Euro strength, which remained steady just off its January lows
- The Australian dollar surged above 99 cents against the USD in the general risk on mood.
Equities:
- The Eurostoxx 50 was up 0.25%, with the FTSE 100 and German DAX the best, the former up 0.7%, the latter almost 1% with the Spanish and Italian bourses sold off.
- The real action was in US equity markets, with the Dow up 1.1%, the S&P 500 up 1.6% while the NASDAQ boosted by over 2% – not because of the Facebook bubble, but the Apple bubble, jumping over $30 per share to $560USD per share. Maybe investors realised at least they make something…
Commodities:
- The crudes saw strength amidst the risk on, with WTI Crude up 1.2% to just over $92.50USD per barrel, whilst ICE Brent was even better, nearly up 2% to just over $109 bbl
- Gold (USD) was flat, but has strong intra-session support during the NYMEX trade, replicating Friday nights action. It closed at $1592USD per ounce again.
- Poor iron ore, saviour of the nation – it continues to be sold off, down below $131USD per metric tonne after almost reaching $150 in the rebound rally from the bubble of last year.
Click here for our economic calendar.
Disclaimer: The content on this blog should not be taken as investment advice. All site content, including advertisements, shall not be construed as a recommendation, no matter how much it seems to make sense, to buy or sell any security or financial instrument, or to participate in any particular trading or investment strategy. The author has no position in any company or advertiser reference unless explicitly specified. Any action that you take as a result of information, analysis, or advertisement on this site is ultimately your responsibility. Consult someone who claims to have a qualification before making any investment decisions.