Overnight Points of Interest

Posted by Graham Parlane on 19 November 2014

Ahead

# Japan Monetary Policy Statement

# BOE MPC Official Rate Vote

# U.S. Building Permits

# U.S. Housing Starts

# U.S. FOMC Meeting Minutes

Overnight

# A lift in a key German consumer confidence survey bolstered European stocks. The market took heart from the big turnaround in sentiment, and combined with the prospect of further ECB support, the Stoxx600 rallied to a 0.61% gain. U.S. stocks also rose taking leads from Japan and Europe. The S&P 500 hit new all-time highs, after statements from global policy makers called more attention to stimulus efforts overseas. The S&P is up 0.63% near its highs although CNBC are reporting a unusually large US$1 bln to sell going into the close.

# After hitting a 22-month low in October, the widely watched German investor confidence index was back in positive territory in November. The ZEW Centre for European Economic Research said today its index of investor and analyst expectations rose to 11.5 in November from -3.6 in October. The gauge aims to predict economic developments six months in advance (as is the case with most sentiment surveys. i.e. how you’re feeling now shows up in the hard data with a 6 month or so lag).

# Solid U.S. housing data was seen in the form of the NAHB Housing Market Index which increased to 58.0 this month from 54.0 in October, well above expectations for a reading of 55.0. Low interest rates, buoyant consumer confidence and solid job creation all supporting a gentle housing recovery still it appears.

# The EUR/USD pushed higher on the upbeat sentiment report in turn giving the USD a broadly offered tone. The NZD/USD, after an early push higher, became a casualty of the latest Fonterra GDT auction. The auction showed average prices down another 3.1% from the previous event a fortnight ago. This was disappointing for those looking for further signs of stabilisation following recent tentative indications. The AUD also underperformed somewhat as RBA Governor Stevens spoke of expectations for further falls in the AUD, at a scheduled dinner address.

# Gold, one of our favourite asset classes for the near term, pushed higher as Russia notified the market place that they had bought about 150 metric tons of bullion this year, expanding the world’s 5th largest (central bank) hoard as plunging oil prices and sanctions push the rouble to a record low. Russia has tripled its gold reserves since 2005 and is now hoarding about 1,185 tons. Gold for immediate delivery rose as much as 1.5% to $1,204.68 an ounce before drifting back a touch to trade around $1,198.00.

# Despite the grand opening of the Hong Kong-Shanghai cross-border link with China, the fanfare surrounding the connection seems to have died down. The entire quota for "north-bound" purchases of A-shares was filled by mid-afternoon yesterday, with only around 16% of the "south-bound" being used by the end of trade. Today, take up was slim, with around 72% of the north-bound quota still available by midday and only 5% of the south-bound quota being used.