Overnight Points of Interest
2013 May 2 by Graham
Good morning
Overnight
# European shares gave back early gains to end up only 0.07% whilst U.S shares were down from the get go, tried to rally on the FED, but were ultimately undone by a large miss in the ADP private payrolls figure. The S&P500 ended near its lows, down 0.93%.
# The ADP Payrolls figure for April was disappointingly weak coming in at +119k versus expectations of a 150k gain. The gain was the smallest in 7 months and provided more evidence that theU.S.economy is reacting to the recent tightening in fiscal policy and higher taxation. Further, the March figure of +158k was subject to a large negative revision down to +131k.
# The Fed pledged to continue its bond buying program at the $85 bio a month pace, made no mention regarding the previous ‘tapering’ talk and left policy options open saying it is “ready to raise or lower that level as economic conditions evolve”.
# Fonterra’s latest GDT milk auction showed dairy prices fell 7.3% on average from the previous event. This is a correction following the strong 60% surge from December last year to April this year. Despite the drop prices still sit 77% higher than a year ago.
# Commodity currencies took a hit with the NZD amongst the weakest. The NZD/GBP and NZD/EUR now sit toward the lower-end of ranges maintained in recent months.
# The pound (GBP/USD) was well supported by a rare piece of better than expectedUKdata. Whilst still signalling contraction by the narrowest of margins, the UK Manufacturing PMI reading was much better than analysts had expected. The gauge came in at 49.8, up from March’s upwardly revised 48.6, and well higher than the 48.5 expected.
# U.S. Crude tumbled as U.S. oil inventories reached an 82-year high amid signs of economic slowdown in the U.S. and China. Crude retreated $2.43, or 2.6 %, to settle at US$91.03 a barrel, falling the most in 2 weeks.
# Likewise Gold fell the most in 2 weeks. Gold holdings in exchange-traded products plunged 174 metric tons last month, the biggest drop ever, as prices entered a bear market and wiped $17.9 billion from the value of the funds.
Ahead
# JapanMonetary Policy Meeting Minutes
# ANZ NZ Commodity Price Index
# AustralianBuildingApprovals
# HSBCChinaFinal Manufacturing PMI
# Eurozone Final Manufacturing PMI
# ECB Interest Rate Decision
# U.S. Trade Balance
# U.S. Unemployment Claims
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Overnight Points of Interest
2013 April 17 by Graham
Good morning
Overnight
# European stocks fell despite an upbeat session in the U.S. as the International Monetary Fund lowered its expectations for euro-zone economic growth and German investor sentiment deteriorated sharply. The EuroStoxx600 fell 0.78%, however the S&P500 rose a solid 1.43% to reclaim most of Mondays fall (is the increased volatility the sign of a bear phase?).
# The IMF cut its global economic growth forecast by 0.2% to 3.3%, citing Europe’s persistent recession and the weakening of the U.S. economy. The IMF forecast a sharper euro-area contraction in 2013, with the French economy expected to contract this year instead of expanding however the fund revised German growth expectations up slightly to 0.6% from 0.5%, once again documenting which country has fared best out of the single currency experiment.
# The German ZEW declined for the first time in 5 months, deteriorating sharply to 36.3 from 48.5 in March, well below economists’ forecasts of 41.0.
# Despite the dour news coming out of the Eurozone, the EUR showed only brief downside early in the session, before rallying strongly to be up 1.5 U.S cents this morning at 1.3180 from yesterday’s 1.3030
# Fonterra’s fortnightly Global Dairy Trade (GDT) auction once again drew higher prices, but only just on this occasion. The auction showed an average 0.6% gain in dairy product returns and with prices now 86% higher than a year ago. The annual rise will go a long way to softening the blow of the drought, which to all intents and purposes is now broken with 10 days of predominantly wet weather forecast across NZ.
# The shockingly high U.S inflation number for February (+0.7%) was largely smoothed out by March’s -0.2% release overnight. Indeed U.S prices are now up only +1.5% from a year ago, the smallest annualised rise in 8 months. This result suggests the FED will be in no hurry to ‘taper’ their US$85 bio per month bond purchase program. As an aside, part of the IMF release overnight noted their expectations are for the first FED U.S. rate rise coming in 2016.
# U.S Housing data was mixed with March Building Permits falling unexpectedly (-3.9% from previous +3.9%) whilst March Housing Starts stayed firm with a large positive revision to February’s data to boot.
# U.S Industrial Production rose in March but the data was patchy with a sharp jump in utilities generating heat offsetting overall factory production declining 0.1%.
Ahead
# N.Z. Quarterly Inflation (inflation below the 1-3% band for 9 straight months ?)
# Australian M.I. Leading Index
# U.K. Monetary Policy Meeting Minutes
# U.K. Unemployment
# U.S. FED Beige Book
Cheers G.
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Overnight Points of Interest
2013 March 28 by Graham
Good morning
Overnight
# Europe was to the fore again with Cyprus revealing more on how it will combat the current turmoil. The EuroStoxx600 was less than enthused falling 0.45%. U.S bourses were mixed however, the S&P500 flat, the Dow down 0.22% but the Nasdaq up 0.13%.
# Cyprus announced capital controls will be in place for 4 days after the banks reopen to limit a rapid outflow of cash form the country. Cyprus will limit the use of cheques to businesses, cap cash withdrawals to 300 euros per day and scrutinize all commercial transactions over 5,000 euros when banks reopen on Thursday. Meanwhile Cyprus State TV reported tonight that the European Central Bank had sent convoys of trucks with container loads of euros to the Cyprus central bank.
# News from Italy also served to unnerve the market. Attempts by Bersani to form an Italian government came to nothing (quote: only an “insane person” would want to govern), and an Italian government bond auction went very badly with the lowest bid-cover ratio in over a decade. The poor auction pushed the 10-year yield to the highest relative to German bunds this year. The benchmark bond yield climbed 21 basis points to 4.78 %, up from 4.50% at the end of last year.
# The EUR once again bore the brunt of the market uneasiness, falling to fresh 4 month lows near 1.2750. In response NZD/EUR pushed to 7 month highs (0.6550) as the recent run of good data, including yesterday’s Fonterra payout upgrade, gave the kiwi a degree of safe haven appeal. The NZD/TWI, the measure of overall kiwi strength, is now within spitting distance of post float (1985) highs.
# Final UK GDP figures revealed the UK economy contracted by 0.3% in Q4, in line with earlier estimates as industrial production posted its biggest quarterly decline in almost four years. The figures confirm that the UK economy finished last year on a very weak footing and worryingly keeps alive the risk of a triple-dip recession.
# Moody’s says the EU’s awkward handling of Cyprus’s bailout has put extra pressure on European sovereign ratings.
# U.S Pending Homes Sales fell to 104.8 from 105.20 last month however analysts suggest the drop can be attributed to a lack of supply rather than weakening demand.
# The U.S 10 year bond is flashing warning signs with the yield now down to 1.83% from 2.09% only a fortnight ago.
# Corn supplies in the U.S., the biggest grower, are shrinking at the fastest pace in almost four decades as improving demand from ethanol refiners drains reserves already diminished by drought. Stockpiles probably fell 38 % in three months to 4.995 billion bushels (126.9 million metric tons) by March 1, the biggest drop since 1975.
Ahead - Today
# NZ Building Consents
# Australian MI Inflation Expectations
# Japan Retail Sales
# Australian Private Sector Credit
Friday
# U.S. Unemployment Claims
# U.S Final GDP
# Chicago PMI
# Japan Manufacturing PMI, CPI and Industrial Production
# University of Michigan Consumer Sentiment
Regards and good Easter break to all
G.
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Overnight Points of Interest
2013 March 20 by Graham
Good morning
Overnight
# The Cyprus bailout drama continued to weigh on European equities with the ‘big board’ EuroStoxx600 closing down 0.45%. U.S. bourses were mixed, but generally heavy, with the S&P500 declining for the 3rd straight day the longest stretch of declines since a 5 day run lower in December. The ‘blue chip’ Dow rose marginally however, up 0.04%
# The Cypriot parliament voted against the controversial bank bailout deal hatched with the EU over the weekend. 36 members of parliament voted no, 19 abstained from voting and no one voted in favor of it. Rejection of the tax effectively blocks a 10 billion-euro EU bailout deal that Cyprus needs to save its banks and ensure government workers continue to receive their salaries. Parliament was presented with a ‘plan B’ whereby accounts holding below 20,000 euros were exempt from the new tax, but that concession was insufficient to convince MPs to accept it. A failure to agree on a bailout package (and some form of ‘deposit tax’) may result in Cyprus getting booted out of the Eurozone however a vote ‘for’ is rather unpalatable too. The uncertainty is likely to weigh on investor confidence a bit longer as there is simply no prior precedent.
# Disturbingly, NZ could face the same type of ‘haircut’ should a bank fail here http://www.stuff.co.nz/business/money/8446573/Kiwis-could-face-Cyprus-style-trim
# At the latest fortnightly Fonterra auction milk prices soared another 14.8%. This is the 7th consecutive fortnightly gain and brings prices to 38% above December levels and a significant 77% above the cycle lows of May 2012. Tempering the apparent good news was data showing that the price rises were driven by a 20% drop in NZ volumes, which by my maths, means NZ Inc. will actually take a step back with this result.
# U.S. builders started more homes in February and permits for future construction rose at the fastest pace in 4 ½ years. Housing starts rose annual rate of 917,000. That’s up from 910,000 in January, and it’s the second-fastest pace since June 2008. The gains are likely to grow even faster in the coming months. Building permits, a sign of future construction, increased 4.6 percent to 946,000
# Investor sentiment in Germany inched higher in March to the highest level for more than three years, with analysts convinced that the outlook for Europe’s top economy remains bright. The widely watched ZEW investor confidence index edged up to 48.5 points in March from 48.2 points in February. That is its highest level since April 2010 (politics in Italy and the Cyprus even may take the gloss off the next one!)
# UK inflation, as measured by the Consumer Prices Index, rose to 2.8% in February from 2.7% pressured higher from rising gasoline costs and mirroring the U.S result of last week.
# Italy Jan Industrial Output rose a solid 0.8% m/m but only due to an overhaul of data used to calculate the index. Annually the result cemented a 3.6% decline.
# Gold jumped to a 3 week high on fears Europe slates crisis may escalate.
Ahead
# NZ Current Account
# Japan Bank Holiday
# China Foreign Direct Investment
# UK MPC Meeting Minutes
# U.S. FOMC Statement
Cheers G.
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Overnight Points of Interest
2013 March 6 by Graham
Good morning
Overnight
# A raft of good European ‘services’ data drove European stocks sharply higher whilst another services report out of the U.S. drove the Dow to new all-time highs, endorsing the move seen in the ‘leading’ Dow Transports sector late last year. The EuroStoxx600 rose a hefty 1.81% whilst the S&P500 is up 0.93% currently.
# All the scheduled European services PMI’s came in at or above expectations, albeit still mired in contractionary territory with readings below the all-important 50 mark.
# EuroZone Retail Sales surprised on the topside rising 1.2% on the month, well above the +0.3% expected.
# The UK PMI services PMI rose to the highest level since September, coming in at 51.8 vs. 51.0 expected.
# The U.S. ISM non-manufacturing index kept the party humming, registering a rise to 56.0 from 55.2 previously and expectations of 55.00. Economists’ expectations of a small decline were blown away, with the index racking up its 38 consecutive monthly expansion. Amazing really. The growth in this index appears tightly linked to the significant improvement in U.S housing.
# A stunning 10.4% surge in milk prices was seen at last night’s Fonterra auction. Prices are now up 23% on a year ago and a full 54% above their mid-May 2012 lows. The auction result will need to be seen in the context of lower volumes however, thanks to the worsening NZ drought. Indeed, auction volumes were down 14% compared to forecast.
# The currency markets were relatively subdued in comparison to the stocks fervour, with most pairs largely unchanged from levels late yesterday.
Ahead
# Australian Q4 GDP data
# U.S. ADP Non-Farm Employment change
# Bank of Canada Interest Rate Decision
# U.S Factory Orders
# U.S. FED Beige Book
Regards G.
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Overnight Points of Interest
2013 February 20 by Graham
Good morning
Overnight
# European stocks made solid gains following an extraordinary German economic sentiment survey, the EuroStoxx600 ending up 1.13%. Across the Atlantic U.S. stocks also rose, the S&P500 up 0.65% at time of writing. The latest Dow rise has the blue chips sitting only 1% away from all-time highs (recall the ‘transports’ eclipsed the all-time highs some time ago now).
# The German ZEW investor confidence survey was simply extraordinary, continuing to surprise to the upside with the headline figure coming in at 48.2 compared to expectations of 35.0. The reading in January was 31.5 which in itself was a big surprise coming after a 6.9 reading in December. These gains over the last two months support the view that Q1 growth will come in positive and more importantly the trend toward an improving economy is likely to continue during 2013.
# The latest Fonterra Global Dairy Auction showed average milk prices up 3.1% since last auction, the 5th consecutive rise. The very strong result taking prices to +8.9% since the start of year. Further data shows that NZ milk production was up 9% in 2012 whilst Australian production of WMP has fallen dramatically (another reason to love NZD/AUD ?).
# The National Association of Home Builders/Wells Fargo housing market index, a gauge of U.S. homebuilder confidence, declined in February for the first time since April, data showed. The index fell to 46 from 47 in January, compared with analyst expectations of 48.
# Copper futures in New York fell the most in four months as a drop in U.S. homebuilder confidence and speculation that China will move to cool property purchases damped demand prospects for the metal used in pipes and wiring. Copper futures for May delivery dropped 2.3 % to settle at $3.6665.
Ahead
# NZ Producer Prices
# Australian Wage Price Index
# RBNZ Gov. Wheeler speaks (on the record at the NZ manufacturer’s employers association)
# BOE MPC Meeting Minutes
# UK Unemployment Rate
# U.S. Building Permits
# U.S FOMC Meeting Minutes
Cheers G.
P.S. Liking the Auckland Blues to outperform this year.
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Market Insight Newsletter – Vol. 1, Issue 29 Futures, FX, CFDs, Equities
2012 December 17 by Company
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Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Overnight Points of Interest
2012 September 18 by Graham
Overnight
# Equities experienced another quiet consolidation of recent strong gains. The EuroStoxx600 drifted off 0.44% whilst U.S. bourses were in effect flat, the S&P500 down 0.13% (Dow up 0.09%).
# The NZD outperformed the field rising to 0.7935 against the AUD and jumping almost half a cent against the EUR to 0.6440.
# At Fonterra’s fortnightly Global Dairy Trade auction NZ milk prices rose a further 2.4%. Prices have now surged 21% in around two months with the US drought continuing to underpin grains prices near multi-year highs.
# Spanish 10-year yields moved back above 6%, up almost 50bps from last week’s low. This largely reflects worries about the Spanish government’s reluctance to apply for a bailout.
# The German ZEW survey headline number came in better than expected at -18.2 vs. -20.0 forecast. However the current conditions index, which some analyst suggest is a better indicator of GDP, fell more sharply than expected to 12.6 vs. 18.0 expected. It’s another indicator suggesting the German economy is being dragged under by peripheral Europe contagion.
# The soft Europe headlines saw EUR/USD as low as 1.3030 from Fridays 1.3170, 5 month high.
# The CRB commodity index fell 1.4% to be down 3% from Friday’s FED inspired rally. This was excuse enough to keep the hammer down on the AUD which continues to suffer from perceptions that the China inspired resource boom is on the wane. In recent days the market has re-priced the chance of a Australian rate cut in the forthcoming October meeting from a 35% chance to 65%.
# UK consumer prices rose by 0.5% in August pushing the annual rate down to 2.5% ( a bigger monthly number clearly dropped off the back of the series). Recall the UK had a long period of inflation above the BOE’s targeted top of 3% so this development gives UK policy makers more room to manoeuvre.
# The US NAHB housing market index bounced to its highest level since June 2006, the 5th straight month of improvement and showcasing the relative bright spot that housing has been for the U.S economy this year (albeit off a very low base).
Ahead
# NZ Current Account
# Japan BOJ Rate Decision
# UK BOE Monetary Policy Minutes
# U.S. Building Permits and Existing Home Sales
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Overnight Points of Interest
2012 September 4 by Graham
Overnight
# European bourses were down on a belated response to ratings agency Moody’s yesterday revising the outlook on the European Union to negative whilst stateside, U.S. bourses were mixed. The EuroStoxx600 ended down 1.13% and the S&P500 basically flat at -0.12%. (The Dow was down 0.42% whilst the Nasdaq was up 0.3%).
# The major news of the evening was the U.S. ISM Manufacturing Survey which came in for the 3rd consecutive month below the boom/bust 50 level at 49.6 (50 had been expected). Will this clear decline in U.S. manufacturing get the FED over the line on the 13th?
# The NZD was one of the weaker performers pressured by NZD/AUD sales as the market trimmed bearish AUD bets following the RBA MPS. The RBA gave a fairly upbeat assessment of the Australian economy, a far cry from the recent hysteria over a slowing Australia (and China) circulating in the FX and interest rate markets. From near 0.7800 the NZD/AUD the cross fell to 0.7750 whilst NZD/USD dribbled to 6 week lows of 0.7920 (in the meantime EUR/USD almost hit 8 week highs – VERY unusual ! ).
# The weak NZD performance is at odds with commodity news released over the last 24 hours. The ANZ Commodity Price Index showed the first gain in 7 months (+0.5%) whilst overnight the latest GDT dairy auction showed a 6% gain in average dairy prices. Importantly, the trend in prices appears to have turned higher, supported by drought conditions in the US. Average global dairy prices are now 23.3% above their mid-May lows and may serve to limit any further downgrades to Fonterra’s recent drop in forecast pay-out.
# European Producer Price Index’s printed at 1.8%y/y vs. 1.6% expected well above expectations suggesting inflationary pressures are not exactly falling off a cliff.
# UK construction PMI dips to 49.0 in August, from 50.9 in July (50.0 expected).
# US construction spending disappoints in July at -0.9%m/m vs. +0.4% expected.
# Heavyweight Apple supported the Nasdaq, bouncing 1.4% higher. The California gadget maker on Tuesday invited members of the media to a September 12 event in San Francisco for what is expected to be the debut of a new-generation iPhone.
Ahead
# Australian Q2 GDP
# HSBC China Services PMI
# UK PMI Services.
# EU PMI Services
# EU Retail Sales
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Overnight Points of Interest
2012 August 29 by Graham
Overnight
# A general lowering of expectations surrounding immediate FED action emanating from the Jackson Hole symposium this weekend saw European markets drift lower whilst U.S equities fared only slightly better after positive U.S data. The EuroStoxx600 fell 0.12% whilst the S&P500 rose a meagre 0.08%. Not too much can be gained from the price action however as trading was affected by the forthcoming Labour Day long weekend. Indeed the Nasdaq had its lowest volume day of the year.
# US Q2 GDP was revised for the better with the Statistics Bureau now suggesting the U.S economy grew at 1.7% from a previous +1.5% read.
# Housing data continues to foster hope for the world’s largest economy, US pending home sales were strong for July registering growth of 2.4% vs. 1.0%m/m expected.
# In a nice trifecta for the U.S. the FED’s beige Book was released showing “the US economy continued to expand gradually assisted by improving housing and retail sales trends”.
# In currency markets the GBP was the best of the G10 whilst the NZD continued to underperform, still feeling the heat of a slowing China, negative sentiment surrounding Aussie resources and a lowered Fonterra pay-out expectation. As a result NZDGBP fell to one month lows of 0.5050.
# Facing up to recent criticism by the German Bundesbank, ECB President Draghi hit back saying the ECB “will always act within the limits of its mandate” but “that fulfilling our mandate sometimes requires us to go beyond standard monetary policy tools”. The no-show at Jackson Hole and these comments suggest a fairly significant announcement from the ECB on Sept. 6th.
# Commodities fell across the board with the precious metals leading the way. Gold backed off from US$1,668 to $1,164 with Silver putting in a similar magnitude fall. Crude Oil (WTI) fell nearly 2% to US$95.45 on news the U.S stockpiles unexpectedly (not from this analyst! – see Time to sell Crude, 29/08 ) grew.
# Iron Ore prices are seemingly in a free-fall, dropping a whopping 5% overnight to $90.30 a tonne. As a result Rio and BHP shares have taken a hit – Rio down near 3% in ADR form.
Ahead
# NZ Building Consents
# NBNZ NZ Business Outlook
# Australian Building Approvals
# Australian Q2 Capital Expenditure
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities