25 November 2014
# Japan Monetary Policy Meeting Minutes
# BOJ Gov. Kuroda speaks
# China CB leading Index
# NZ Inflation Expectations
# German Final GDP
# RBA Dep. Gov. Lowe speaks
# U.S. Preliminary GDP (2nd reading)
# U.S. Case-Shiller House Price Index
# U.S. CB Consumer Confidence
# U.S. Richmond Manufacturing Index
# The bad news is good news dynamic was again in play overnight, this time in reverse as European stocks gave up early gains after improved confidence readings in Germany. Thus it was a case of good news being bad as the more upbeat business sentiment arguably diminishes prospects of immediate ECB action. By session end the Stoxx600 was up just 0.14%. It has been a mixed session for U.S. stocks, for the most part positive as the Dow transports, long regarded as the most timely index, rallied 60 points to a new record high on weaker Crude prices. The Dow itself however was washing around just below par whilst the Nasdaq was up solidly and the broad S&P500 just mildly up. An hour out from the close the Dow is down just 0.06% and the S&P up 0.20%.
# German business confidence improved unexpectedly in November reversing last month's decline. The German IFO index rose for the first time in 7 months to 104.7 in November from 103.2 in October, which was the lowest reading in nearly 2 years. The survey, which questions a substantial number of executives (7,000), had been expected to fall a touch again. Further’ all sub-indexes including current conditions and future expectations improved moderately.
# In a complete reversal of Fridays action forex markets sent the EUR and GBP higher whilst the NZD and AUD fell, and in the case of the AUD, sharply. The boost for the antipodeans from the PBOC easing ( why this sudden ease – what conditions are the central bank seeing?) seems to have quickly dissipated, and with easing commodity prices the AUD was clubbed the best part of 1 U.S. cent lower.
# U.S. imports of crude oil from OPEC nations are at their lowest level in almost 30 years, reports the FT, underlining the impact of the shale revolution and advances in hydraulic fracturing. In August, OPEC’s share of U.S. crude oil imports dropped to 40% – accounting for 2.9M bpd – the lowest since May 1985. At its 1976 peak it stood at about 88%. OPEC leaders will meet in Vienna on Thursday to consider cutting output to shore up prices.
# Crude oil prices fell for the first time in 3 days as investors weighed the odds of a production cut from OPEC this week. WTI for January delivery fell 73 cents, or 1 %, to $75.78 barrel on very light volumes.
# U.S. bond yields fell a touch but remain at familiar levels, the 10 year note yield dropping to 2.30% from 2.34% on the day. The auction of various U.S. treasury notes went well, drawing the highest demand since December, suggesting that the bond markets (the smart money!) is not expecting any imminent Fed rate raise.