by Chris Becker
Macro Wrap
It’s a new week – what magic will the markets bring this time around? Let’s recap Friday night and then have a look at the week ahead.
The major data release was the June German IFO survey, which measures the business climate, economic sentiment and expectations of Europes powerhouse. The results were not as expected at all, with expectations slumping to below the usual 100 level, signifying contraction ahead. As you can see on the chart below, that crucial component of the survey seems to lead the German DAX (and thus Euro bourses):
Markets actually did react poorly to the result, selling off in Europe, but this was not carried over the Atlantic as trader’s laughed at the Moody’s downgrades of US banks by bidding them up so all US bourses finished nicely up in the green. The S&P 500 was up 0.7% at 1,335, the DJIA up 0.5% and the NASDAQ up 1.2% to 2,892. The Euro Stoxx 50 slumped 0.7% with the German DAX down 1.3% and the FTSE also losing 0.9%.
There wasn’t much action on other markets, with commodities broadly flat, although energies put on a small rally due to a tropical storm in the oil-producing Gulf of Mexico. Currencies and debt markets were fairly benign.
SPI Futures this morning are flat, with the ASX200 likely to open at around 4040 points or so.
What to expect today and tonight
Locally there’s no big data prints today, in fact all week, except the RBA’s private sector credit data on Friday which will interesting as always.
This week’s dataflow will be characterised by US prints – namely the Dallas, Richmond and Kansas City Fed manufacturing indicies, the Case/Shiller house price index and final GDP prints for Q1. Germany will also release its May unemployment and CPI figures whilst the EMU releases May economic sentiment for May. I’ll update the calendar shortly.
You can find me on Twitter here sometimes. Been bloody busy lately, sorry for lack of tweets etc.
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