10 September 2014
# Australian Westpac Consumer Sentiment
# China New Loans
# UK Inflation Report Hearings
# European stocks fell for a 3rd day as peripheral indices fell hard on the presumption that the UK situation could spill over into Europe’s economy. Greece’s ASE Index fell 2.6%, as Portugal’s PSI 20 Index slid 1.5% and Spain’s IBEX 35 Index retreated 1.4%, for the biggest drops among 18 western-European markets. The pan-European Stoxx600 fell a far more modest 0.40%. Likewise U.S. stocks also fell as the San Francisco Fed paper continues to reverberate through the market. The S&P500 fell 0.65% to a 2 week low. Apple Inc.’s much publicized product launch saw Apple up 4.8% before the stock gave up all the gains and more to end down 0.40% by session end. The Nasdaq index fell 0.82%.
# UK Industrial Production rose 0.5% in July beating expectations of a +0.3% result.
# Fed chair Yellen’s favoured JOLT’s employment report showed job opening held near 13 year highs as hiring picked up in July. The report showed employers hired 4.9 million workers in July, the highest level since December 2007, whilst employers reported 4.7 million job openings in July, which is near the highest since 2001.
# The U.S. NFIB small-business optimism index inched up to 96.1 in August from 95.7 in July and 95.0 in June. The sub-indexes were mixed as improved capital-spending plans offset a decline in hiring plans. The annualised rate came in at a rather tepid +1.7%.
# For a 2nd day running the AUD/USD was the major underperformer falling another 1% to below 0.92 for the first time since March. It appears the Aussie is finally succumbing to the twin weight of USD strength combined with more attention on the very weak iron ore price. Overnight, iron ore slipped another 0.5% to $83.2, its lowest since 2009. Meanwhile the USD hit its highest level against the JPY since the GFC broke in 2008.
# The benchmark U.S 10 year yield rose again, this time grabbing a foothold above 2.50% for the first time in 5 weeks.
# Commodities as a whole declined to the lowest level in almost 8 months as the USD advances on speculation that the Federal Reserve will increase interest rates next year, curbing demand for raw materials. The Bloomberg Commodity Index) that tracks 22 futures lost as much as 0.5% to 123.6507, the lowest since Jan. 13. Nickel tumbled the most since May, Corn traded at a four-year low and Brent crude declined for a 4th day to 17 month lows.
# Iraq's parliament approved a new government headed by Haider al-Abadi as prime minister last night, increasing the prospects for a more unified front to combat the growing power of Islamic State. Abadi's new cabinet includes members from Iraq's Shi'ite majority and its Kurdish and Sunni minorities, and was hailed by the U.S. as a major milestone.
# Despite the EU formally adopting a new sanctions package against Russia yesterday, it will delay enforcing them while it assesses whether a cease-fire in Ukraine is holding.
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