Deus Forex Machina

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Macro Morning: Australian dollar breakout

The Australian dollar has broken higher against the US dollar and continued its push against the Yen overnight as the US dollar was weaker and stocks higher after the export data from the US disappointed. Looking at the data the key out turns were the ZEW economic surveys in Germany and Europe which printed very

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Macro Morning: The Full Monti

Last night markets hit the Italian stock market hard and it was down around 3.79% at one point before closing down just 2.2%. Italian bond yields rose 30 odd points and Italian CDS spreads were similarly pressured. The rest of Europe was less worried, recovering from early losses as you can see below in the

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Macro Morning: Euro falls off its own cliff

A very interesting night last night when you look at European markets – the euro was hit hard falling from a high of 1.3087 to a low of 1.2948 but the DAX hit a 5 year high. The key driver of these divergent moves was the ECB’s decision to leave rates at 0.75% last night

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Macro Morning: China, fiscal cliff buoy markets

Stocks are up in the past 24 hours from Asia, across Europe and into the US. Positive comments from Chinese Communist Party Leader Xi Jinping about growth and the report from the Chinese Academy of Social Sciences that growth will accelerate from 7.7% to 8.2% in 2013. Equally supportive of US markets in particular for

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Macro Morning: Aussie and euro march

While equity markets across the globe wait patiently for the outcome of the US fiscal cliff talks, FX and commodity markets are pushing on with some important moves. Euro was higher again and is on its way to test resistance at 1.3175. The Aussie dollar broke sharply higher after the RBA cut yesterday which as

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Macro Morning: Euro breaks 1.30 on Greek punt

The euro was the big winner overnight surging up through 1.30 on the news that Greece was planning to buy back up to €30 Billion of its €62 billion of its debt that is in private hands at some like 32 cents in the dollar. PMI data improved as well across the globe in most nations except

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Macro Morning: Hang on for a huge week

Stocks were largely unchanged in the US on Friday night with fairly quiet ranges. The optimism that pervaded Asian trade after the announcement of  ¥1.2 Trillion stimulus package had most impact in Asian share markets and on Yen crosses but the bourses of Europe and the US were more subdued. It is a huge week

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Macro Morning: Aussie reverses

Europe had a good night following on from Asia’s strong performance yesterday but the US had a more volatile trade buffetted by a reversal of Republican House Speaker John Boehner’s positive comments from the day before. President Obama was also less positive but in the end the US is closing stronger. On the data front

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Macro Morning: Fiscal rollercoaster

The fiscal cliff roller coaster continued overnight with early stock market losses in Europe and the US reversing after  Republican leader and House Speaker John Boehner said that he is willing to put revenue on the table and is hopeful that a deal can be done over the fiscal cliff. This helped stocks turn around

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Macro Morning: Caution

It was a positive day for most of Asia and Europe with stocks up and the US dollar on the retreat after the Greek deal was announced in our morning yesterday. But US traders preferred, or had no choice, but to worry about the fiscal cliff. It would be easy to dismiss what seems to be

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Macro Morning: Fear wins the day

A day when fear or caution won the day as traders found it difficult to push prices higher. Stocks were lower and the USDJPY continued its recent reversal. The Aussie is essentially becalmed but wanting it seems to break higher at some point. It’s hard to know what’s different on a Monday that isn’t apparent

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SCA Property is not a yield play

From Macro Investor. It’s hard not to respect Woolworths (WOW) for the job they  have done over the past 20 years or so, building their brand  and diversifying their business to the point where they are as  ubiquitous as the Australian sun. Although they have assets and businesses outside of  supermarket retailing, their sales are

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Macro Morning: Stock rocket

Last week was a good week for stocks and for the first time in ages and my summary of the week’s events had more positives than negatives from the fundamental side of the equation. But this week will need to see confirmation of the moves higher in stocks because of the interrupted holiday trade and also because

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Macro Morning: China buoys stocks

With US markets closed for the Thanksgiving holiday Europe had a great night after the positive improvement in the Chinese HSBC  PMI was built upon with reasonable PMI outcomes from Europe’s big economies. The Yen also weakened substantially as well but its rally back is suggestive of an interim bottom for the moment. Looking at

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Macro Morning: Yen farewell

A quiet night for stocks which shrugged off the lack of a Greek deal in Europe and focussed on the Thanksgiving holiday coming up. The big news was really the move in the Yen which is under intense pressure across the board. Japan remains the world’s third largest economy but the data that is flowing

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Macro Morning: Stocks volatile

Jean Claude Junker is famous for saying that sometimes you just have to lie. Alan Greenspan wrote something similar in his biography and it is advice that perhaps Fed Chairman Ben Bernanke might have heeded overnight after his honesty knocked the S&P 500 from around flat to down 0.5% almost instantly. The Fed Chairman said

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Macro Morning: Risk rally extends

Whether it was seasonal bullishness of simply less concern about the fiscal cliff doesn’t matter because stocks and risk extended their rally overnight dragging the Aussie dollar higher and pushing the US dollar lower once more as the usual correlation asserted itself. Housing data in the US was good last night as well. The NAHB

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Macro Morning: Bounce time?

The S&P and the Dow rallied hard from their lows on Friday night as the market got a filip from the “constructive” talks from US political leaders on Capitol Hill. Indeed from the very moment the press conference began and it became clear that they are trying to work toward a resolution stocks rallied. I

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Macro Morning: More bad data

It was another bad night for data in Europe and the US, as well as for equities across the board and the Aussie dollar which for a short time has resumed normal transmission. Looking at the European data we see that the Eurozone reported growth of -0.1% in Q3 which on top of the -0.2%

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Macro Morning: Stocks plunge

Equities are getting crushed as a combination of European fears, weak data and the fiscal cliff give the bears the upper hand – even the almighty Aussie dollar was under pressure overnight as bonds rallied and buyers exited the market. On the data front it was weakness everywhere. In the UK even though the  unemployment

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Macro Morning: Rally gone

A volatile 24 hours with Asian weakness moving into Europe before rumours and hopes saw a late rally near the close buoying the US markets which had started down. But in the last hour of trade everything seems to have reversed for the US and the sellers have re-emerged. Europe had a couple of catalysts

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Macro Morning: Holiday trade

Veterans day in the US is a holiday but stock and other markets remained open in the US overnight although you would be hard pressed to notice given the very tight ranges. Certainly Asia had an interesting session after the weak Japanese GDP data was released juxtaposing the better Chinese data from the weekend. We saw

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Macro Morning: Chinese Data v the fiscal cliff

So is it going to be the fiscal cliff or improving Chinese data or Europe that dominates trade this week? Or could it simply be the poor and deteriorating price action in the US stock market that will dominate trade? University of Michigan Consumer Sentiment data on Friday was a welcome bright spot after the

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Macro Morning: Earnings above all

Unlike Thelma and Louise, markets are not keen on careening over the fiscal cliff and stocks were lower for a second day and the US dollar and the Japanese Yen gained. Let’s not forget though as I have been writing since the start of this Q3 earnings season that I felt the risks were that

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Macro Morning: Smashed

Yesterday I said I had no idea why the markets rallied and in my experience that is always a warning which is why I argued that the rally yesterday was  “pre-emptory given the final ballot in the US election has not been cast and the fiscal cliff still looms.” And so it was overnight that stocks,

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Macro Morning: Election bounty

There is no papering over the fact that I have no idea what drove the huge rally overnight. Initially the rally in stocks was blamed on a rumour (since debunked) that Romney was ahead in the crucial state of Ohio but the fact that the rally held and that oil kept rallying says that something

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Macro Morning: Caution

It was a cautious night with the euro and European bourses coming under renewed pressure in as concerns about Greece and its bailout combined with a rise in Spanish unemployment so that  4.8 million Spaniards are out of work. Equally a bit of US election uncertainty weighed. In the US there seems to be two

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Macro Morning: Focus on the fiscal cliff

Markets are strange creatures and even though US non-farm payrolls on Friday night exceeded pundits expectations of 125,000 with an increase of 171,000 in October US stocks closed lower having been in the red for most of the day. Crude oil and gold were sharply lower as the US dollar’s strength reinforced the selling pressure

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Macro Morning: Data dawn

Stocks were higher across the board overnight with the strength driven by better data in the US and China’s move to pump $60 billion of liquidity into their markets this week. I like the way the Wall Street Journal summed up the manufacturing data we have seen in the past 24 hours or so because