9 September 2014
# Australian NAB Business Confidence
# BOE Gov. Carney speaks
# UK Manufacturing and Industrial Production
# U.S. NFIB Small Business Index
# European stocks pulled back from 4 straight weeks of gains, unnerved by developments surrounding the Scottish independence decision. With investment giant Goldman Sachs warning that any breakaway could cause a Eurozone style crisis the Stoxx600 succumbed to profit taking to end down a moderate 0.43%. Similarly, after a record close Friday, the S&P500 eased to the tune of 0.31%. With no particularly obvious new news from the stateside session the likelihood is that the UK developments along with the revision down of Japan’s Q2 growth weighed on sentiment.
# The USD was broadly bid again, quickly shaking off the weaker than expected U.S. jobs data Friday. The USD Index is at its highest level in over a year. In a move somewhat overdue in our opinion, the AUD finally underperformed, after having performed incredibly well in the face of sharply lower iron ore prices in recent months. The ‘Aussie’ fell the best part of 1 U.S. cent during the offshore session. The USD/JPY rose to its highest levels since late 2009 whilst the ‘kiwi’ fell to new 7 month lows. Of course these latest moves no doubt had their foundation in the huge GBP decline Monday morning.
# Supporting the sharp fall in Iron Ore prices of late, yesterday’s China import data was very weak at -2.4% m/m (+3.0% expected).
# US Consumer credit rose USD 26.01bln versus forecast 17.35bln, the biggest rise since Nov 2001.
# A San Francisco Fed research piece doing the rounds noted that investors are currently expecting a more accommodation than the FOMC itself suggested in June. The piece is of course generally supportive of the USD moves. The U.S 10 year bond yield rose from 2.42% to 2.47% in response.
# A rare piece of good news from Euroland with Spain’s Economy minister saying Spain will revise upwards growth f/c for ‘14/’15.
# The crude oil complex continued to decline with Brent crude dropping to a 16 month low as falling Chinese imports bolstered concern that slower growth will worsen a global oil surplus. West Texas Intermediate slipped to the lowest level since January. The European benchmark fell 0.6 % while WTI decreased 0.7%.
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