by Chris Becker
Macro Wrap
Another very interesting session overnight on risk markets, the takeaway being crude rose, gold flat,bonds very mixed and King Dollar remaining strong.
Across the Atlantic, where things are fine, thank you very much, pesky Europeans aside, with the usual weekly jobless claims (bang on consensus at 370K, but previous result revised up and the moving average not well, moving), and April durable goods orders coming in low, but still positive year-on-year:
And then the Flash Manufacturing PMI for May came in at a very positive 53.9, versus 56 previously, a minor deceleration but still looking good for the “double exports by 2015” meme, but I’m more concerned about costs for consumers – which make up 70% of the US economy, particularly gas prices.
Today:
Data today locally is sparse again but regionally the Japanese release their April CPI result, with expectations of 0.1% increase, to confirm a rising trend in the still debt deflation bound island nation. Then tonight, just US consumer confidence which has been rising since the August 2011 nadir.
The SPI Futures are suggesting a very modest open point for the ASX200 on the open, at around 4070 points or so.
Bonds:
- A weird night on bond markets, with US 10 year Treasuries yields falling by 4 points to 1.77%, German 10 year bunds and UK 10 Gilts flat, but French 10 years seeing massive bids, the yields falling by a dramatic 20 points:
- Spain and Italy bond volatility continues, this time on the “good” side, yields falling back, but still highly elevated as talk/arrangements/speculation/no leadership whatsoever continues about the Euro actually becoming a modern currency, not the barbaric relic that it is…
Currencies:
- The US Dollar (in USD index terms) remains well above 82 points, strengthening overnight, mainly due to weakness in the Nordic bunch, with the Euro remaining weak and below 1.26 against the USD, below its January 2012 lows and GFC low at 1.2537 (but not the Greek Crisis Mk 1 in May 2010 – can Greek Crisis Mk 2 push it over?)
- The Australian dollar was a volatile little minx last night, still trying to find a temporary bottom just below 98 cents against the USD last night, finishing this morning at the same level 24 hours ago at 97.63
Equities:
- The Eurostoxx 50 was up 1% for the night, reflecting the bullish mood on equity markets across the continent, and indeed the UK, with the FTSE 100 up 1.6% and the best performer.
- However, this again did not translate to further action across the Atlantic in US equity markets, with the Dow only up 0.3%, the S&P 500 flat while the NASDAQ took back yesterday’s gains. All the major US bourses are struggling to lift themselves off the mat from this stage of the correction and perhaps give Uncle Bernanke an excuse to turn on the printing press again?
Commodities:
- The crudes rose, with WTI Crude up 0.8% to just below $91USD per barrel, whilst ICE Brent was stronger, up 1.3% to $107 bbl.
- Gold (USD) also had a strange night, finishing were it started, and feeding the conspiracy theories about selling into the NYMEX session, as you can see in the chart below:
- Finally to Iron ore, which remains very weak, selling off sharply yesterday but gaining a few cents last night, at just above $130.30USD per metric tonne
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.