Overnight Points of Interest

Posted by Graham Parlane on 12 November 2014

Good morning

Ahead

# RBNZ Financial Stability Report

# RBNZ Gov. Wheeler speaks

# Australian WBC Consumer Sentiment

# Australian Wage Price Index

# Eurozone Industrial Production

# BOE Gov. Carney Speaks

# BOE Inflation Report

Overnight

# European stocks built on Mondays 0.7% gains with the Stoxx600 ending up another 0.36%. More solid earnings reports underpinned, this time with market notable, Vodafone, who was the top gainer rising 5.3% after lifting its earnings forecast. U.S. stocks managed a push to marginal new all-time highs for a 5th straight day but were slightly lower in late trade. There were no U.S. government economic reports overnight due to the U.S. Veterans Day holiday, which also served to keep volume light. The benchmark S&P500 has rallied more than 9% from a six-month low in October, buoyed by supportive economic data and solid corporate earnings reports. For the year, the index is up over 10%.

# Gold mining stocks are rallying strongly are months of relentless selling, a move that bears watching. Gold stocks often rise ahead of the actual bullion price and we are now seeing some signs of Gold strength itself this morning.

# Alibaba set a record Tuesday on China’s largest online shopping day even though the rate of growth was slower than last year. The E-commerce giant reported more than $9 billion in sales on China's Singles' Day, illustrating the buying power of the Chinese consumer and the importance of the event in the retail calendar. The shopping day, similar to Cyber Monday and Black Friday in the United States, comes less than 8 weeks after Alibaba's record $25 billion public share listing in New York. Despite the phenomenal result shares of Alibaba were down 3.4%, retracing recent gains.

# The U.S bond market may have been closed and equity market trading quiet on the U.S. Veterans Day holiday but it was anything but quiet in the FX markets. Without any distinct market moving news the USD sold off with the NZD and AUD the prime beneficiaries. Both of the Antipodean currencies are more than a cent higher this morning. The price action, on no new news, is somewhat suggestive that the 4 month USD bull run may be over for now. Bullish sentiment and positioning has been at extremes recently. Conversely, the outsized move could have simply been a ‘long’ market squeeze in thin holiday affected trade. Close attention to be paid in coming sessions then.

# Philadelphia Fed President Plosser expressed concern over low interest rates in the U.S., which he said are unprecedentedly low. "There are many indicators that tell us interest rates are too low," Plosser, is to be fair, one of the Fed's most outspoken "hawks".