Overnight Points of Interest

Posted by Graham Parlane on 27 November 2014

Ahead

# NZ Trade Balance

# Australian New Home Sales

# Australian Private Capital Expenditure

# German CPI

# OPEC Meetings

# U.S. Thanksgiving

Overnight

# The EuroStoxx600 ended the session unchanged after 3 straight days of gains. Despite the unveiling of a 5 year, €315 billion private-public investment plan by the European Commission the index was unable to push on. Stateside key stocks indexes were mixed for a 4th day in relatively light trade as many participants headed off home for the major Thanksgiving break. A raft of disappointing U.S. data sent the USD lower but stocks held in at familiar levels. On a little side note Apple Inc. became the most valuable company ever, its market cap hitting US$700 bln in overnight trade. The stunning market cap does not however give Apple the honour of most valuable company ever as Microsoft, at its peak, accounted for almost 5% of the total index value, while IBM Corp. accounted for 6% in the 1980s. Apple currently has a weighting of less than 4% in the index because the S&P 500 has risen to record levels.

# The general softening in U.S. data witnessed over the last month continued, indeed picked up pace, with multiple economic measures all falling short of expectations. U.S. weekly jobless claims rose above 300,000 for the first time in 11 weeks, Durable Goods Orders (ex-transport) came in at -1.3%m/m versus +1.0% expected, the Chicago PMI registered 60.8 v 63.0 expected and Pending Home Sales fell -1.1% v +0.5% expected.

# The U.S. PCE Index, closely watched by the Fed, came in at a benign 1.4% offering no new impetus for rate rises in the U.S. any time soon.

# U.S. bonds yields, as measured by the benchmark 10 year, note declined again the move to 2.23% from 2.26 yesterday seemingly further confirmation of a break lower out of the 2.30/2.40% range hat had prevailed for the best part of a month. Lower U.S. yields likely lie ahead in the midterm.

# The 2nd estimate of UK Q3 GDP came in line with expectations at 0.7%q/q (3.0%y/y) but the breakdown was somewhat underwhelming. While consumption was slightly above expectation, capex was disappointing at 1.0%q/q v 2.3% expected.

# Standard &Poor’s Kraemer said the risk of Britain eventually leaving the European Union appears to be rising, which might force S&P to "reassess" the country's top-grade AAA rating.

# The NZD broke through important resistance against the AUD pushing to its highest levels in 5 months with prospects for a continuation of this move looking solid.