Overnight Points of Interest
2013 May 16 by Graham
Good morning
Overnight
# The rally in European andU.S.shares equities continues unabated with the EuroStoxx600 rising to fresh 5 year highs whilst the S&P500 closes at new all-time highs. The bourses closed up 0.79% and 0.51% respectively despite a poor Eurozone GDP read and a set of underwhelmingU.S.data.
#U.S. Industrial Production fell a larger than forecast 0.5%, the most in 8 months.
# The U.S. Empire Manufacturing Index unexpectedly contracted in May, falling into negative territory at -1.43 when +4.0 was expected. The reading was the lowest level in 4 months as employment intentions pulled back and new orders fell.
# To complete the trifecta, U.S. Producer Prices recorded their largest drop in three years as gasoline and food costs tumbled, pointing to weak inflation pressures.
# The one bright light was that confidence amongU.S.homebuilders improved in May for the first time in five months as buyers rush to take advantage of near record-low mortgage rates. The National Association of Home Builders/Wells Fargo index of builder confidence rose to 44 from a revised 41 in April.
# The data bought the run higher in US bond yields to a halt with the benchmark 10 year bond retreating from 2 month highs of 1.98% to 1.93%.
# Advance European Q1 GDP figures were disappointing. The 6th consecutive contraction in Eurozone GDP was slightly larger than expected at -0.2% vs. -0.1% expected with a meagre +0.1%q/q increase in German GDP growth particularly worrying ( +0.3% expected) .
# Under PM Abe’s ‘all in’ program to kick start the Japanese economy, the BOJ announced it will pump ¥2.8t into the money market to “address the rapid increase in longer-term interest rates”. This afterJapan’s 5-year borrowing costs rose aboveGermany’s for the first time in 20 years.
# Gold futures tumbled below $1,400 an ounce, extending the longest slump in almost three months, as the dollar’s rally eroded demand for the metal as an alternative investment. Silver fell to a three-week low. The greenback climbed to a nine-month high against a basket of major currencies. The euro fell to the lowest in almost six weeks against the dollar as the euro-area’s recession extended to a record sixth straight quarter. Gold has declined 17 % this year as some investors lost faith in the metal as a store of value.
Ahead
# Business N.Z. Manufacturing Index
# JapanPrelim GDP
# N.Z. Annual Budget
# JapanIndustrial Production
# Eurozone CPI Data
# U.S.Building Permits
# U.S.CPI
# U.S.Housing Starts
# U.S Philadelphia Fed Survey
Cheers G.
BBY (NZ) Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Overnight Points of Interest
2013 May 7 by Graham
Good RBA Tuesday morning
Overnight
# The EuroStoxx600 spent the entire day in the red, but rallied late on supportive comments from ECB President Draghi, to end effectively unchanged at -0.02%. Stateside, stocks were mixed with the S&P500 rising +0.19 but the Dow ending a fraction down at -0.03%.
# Eurozone Retail Sales dropped for the 2nd month in a row with the volume of sales falling -0.1% on the month, after a 0.2% drop in February. The year-on-year reading showed a worse-than-expected 2.4% drop, underlining fears about the Eurozone’s economic growth in recent months.
# Eurozone services and manufacturing output shrank for a 15th straight month in April. A composite index based on a survey of purchasing managers in the manufacturing and services industries increased to 46.9 from 46.5 in March but remained well below the expand/contract mark of 50.0.
# Later ECB President Draghi said ; “We will be looking at all the data that arrives from the euro-area in the coming weeks and if necessary, we are ready to act again”. He once again discussed the idea of reducing the bank deposit rate to less than zero. The EUR/USD gapped lower after the comments, from 1.3110, to find support just below 1.3060. It sits around 1.3080 this morning.
# A survey on lending from the U.S. Federal Reserve released Monday indicated that banks saw stronger demand for loans over the past three months, and reported easing their lending standards.
# U.S. benchmark 10 year bond yields rose again, building on Friday’s positive jobs data surprise and the ensuing key weekly reversal of last week. The yield lifted to 1.77% from 1.73% yesterday and the low of 1.61% last week (Higher U.S. interest rates going forward v cuts/easing bias’s elsewhere to lift the USD?).
Ahead
# NZ Labour Cost Index
# AIG Australian Construction Index
# Australian Trade Balance
# Australian House Price Index
# RBA Cash Rate decision (futures market is 50:50 so there will be a decent reaction either way)
# German Factory Orders
#U.S.Consumer Credit
Cheers G.
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Overnight Points of Interest
2013 May 1 by Graham
Good morning
Overnight
# European stocks lost ground on a record Eurozone unemployment number howeverU.S.stocks made moderate gains with the S&P500 rallying to new all-time highs in the last few minutes of the session. The EuroStoxx600 ended down 0.23% whilst the S&P500 rose 0.25%.
# Eurozone unemployment for March rose to 12.1%, the highest since 1995. There is now more than 19 mio people out of work in the combined economic zone. The biggest rise in unemployment was inGreece, where the jobless rate jumped by almost a percentage point in one month to 27.2%. Youth unemployment in the bailed-out nation crept closer to 60%, with 59.1% of 16 to 24-year-olds out of work in January, compared with 58.4% in December.
# Meanwhile Eurozone inflation fell to a 3 year low of 1.2% in April, the biggest monthly drop in more than 4 years. The combined inflation and unemployment data has many analysts expecting an interest rate cut from the ECB this week.
# Spain announced that their economy, the 4th largest in the Eurozone contracted a further 0.5% in Q1, the 7th consecutive decline. The latest figure is in line with Bank of Spain forecasts which predict that Spain’s economy will shrink by around 1.3 % by year end and not begin to return to growth until well into 2014. Embattled Prime Minister Mariano Rajoy was forced to acknowledge that despite stringent austerity measures the nation would need an additional two years to bring its public deficit to within the 3 % limit demanded by European Union partners.
# German Retail Sales fell for a second month in March, adding to signs that Europe’s largest economy is struggling to recover.
# Despite the rotten data the EUR actually rallied against the greenback by as much as 1% at one stage, lifting from 1.3053 to 1.3184.
# The likely catalyst was the Chicago FED PMI which showed manufacturing conditions in the Chicago region contracted for the first time in 3.5 years. The index dropped to 49.0 from 52.4 in the month of April hitting its lowest level since September 2009.
# U.S. Consumer Confidence rebounded in April rising to 68.1% v 61.0 a 5 month high, most probably driven by improving house prices.
# S&P/Case Shiller US house price index a composite index of 20 metropolitan areas rose 1.2%m/m in February, the strongest in six years.
# Apple Inc. set a record for the global bond market with a blockbuster $17bn debt sale on Tuesday as the iPhone maker raised capital to fund its plan to return $100bn to shareholders. While Apple has $145bn of cash on its balance sheet, only $45bn is held in theUS and repatriating foreign reserves would be costly due to tax implications. This has motivated the company to access the US debt market for the first time.
# U.S. 10-year yields touched a 4-month low of 1.64% overnight as falling inflation (the core PCE fell to 1.1% on Monday) and deteriorating economic data has raised speculation the Fed could be a little more dovish this time around (no tapering talk).
# U.S Crude dropped 1.1% ahead of tonight’s stockpiles report which is expected to show ever increasing U.S. reserves.
Ahead
# AIG Australian Manufacturing Index
#ChinaOfficial Manufacturing PMI
# RBA Assist Gov Edey Speaks
#UKManufacturing PMI
# ADP Non-Farm Employment report
#U.S.ISM Manufacturing PMI
# U.S Construction Spending
Cheers G.
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Overnight Points of Interest
2013 April 24 by Graham
Good morning
Overnight
# European stocks somewhat perversely roared higher as weak European PMI data spurred speculation that the ECB may be forced to cut interest rates. The EuroStoxx600 ended up a hefty 2.43%. Similarly, U.S bourses also made solid gains, the S&P500 rising 1.04%.
# Eurozone Manufacturing PMI remained firmly in contraction, the data coming in at 46.5, below both the previous reading of 46.8 and analyst expectations also of 46.8. Further, the rather grim reading showed that Germany, previously the last bastion of European growth, has now been infected by the periphery’s problems. Both German manufacturing (47.9) and services (49.2) are now in contraction.
# The U.S. Flash Manufacturing PMI fell to a 52.0 reading in April from 54.6 in March.. This is the lowest reading in six months. New orders slowed sharply in April, employment also expanded at a slower rate. Although the U.S data was still above 50, and thus in an expansionary phase, the data completes yesterdays’ trifecta of slowing manufacturing in the world’s 3 biggest economies. The decline is very important as it raises concerns that the U.S. manufacturing expansion is losing momentum rapidly as businesses and households worry about the impact of tax hikes and government spending cuts.
# Sales of new U.S. homes advanced in March as near record-low mortgage rates helped the industry complete the strongest quarter since 2008, putting the economy on firmer footing. Purchases of single-family properties climbed 1.5 % last month to a 417,000 annual pace against expectations of a rise of 416,000.
# There was high drama in the U.S session with a bogus ‘tweet’ significantly affecting trading. Around 5.00am this morning the Associated Press had its Twitter account hacked, announcing an explosion at the White House. The Dow momentarily dropped 150 points whilst the USD/JPY gapped from around 99.30 to below 98.60. This false information was quickly denied and the Dow and the USD/JPY quickly returned to previous trading levels.
Ahead
# Australian CPI
# RBA Deputy Gov. Lowe speaks
# German IFO Business Climate
# U.S Durable Goods
Cheers G.
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Overnight Points of Interest
2013 April 22 by Graham
Good morning
Overnight
# Equity market action Friday appeared to have all the hallmarks of position squaring into the weekend after a week of rather heavy falls. The EuroStoxx600 rose 0.52% to be down 2.46% on the week. The S&P500 rose 0.88% to end the week down 2.1%. The modest gains apparently came on very light volume which is a negative for bulls.
# Ratings agency Fitch cut the UK’s sovereign debt rating to AA+ from AAA, citing a weaker economic and fiscal outlook. But it returned the outlook to “stable”, removing the threat of any further rating action, at least in the near term. This aligns the rating with Moody’s downgrade earlier this year so does not come as a huge surprise.
# The G20 didn’t single out Japan for overseeing a huge fall in the JPY since mid-November when it first became apparent that Abe would be the next Japan PM. If there was criticism of Japan’s policies – the G20 members kept it on the hush-hush. As a result USD/JPY is probing towards 100.00 this morning with the market sensing a ‘green light’ for further JPY weakness. It appears the G20 is less concerned about currency wars and sovereign debt blow-outs and instead want to encourage economic growth initiatives. This is the main reason Japan escaped criticism for at least indirectly pushing the value of the Yen significantly lower.
# Australian Treasurer Swan said the Australian budget has taken a 7.5 BLN AUD “sledgehammer hit” saying the high Australian dollar and falling terms of trade are to blame.
# Italian Parliament elected Napolitano to second term as President with overwhelming majority.
# Best to worst performing currencies last week
CCY Apr5 Apr 12 % change
EUR 1.3111 1.3051 -0.46%
CHF 0.9270 0.9332 -0.67%
GBP 1.5348 1.5230 -0.77%
JPY 98.38 99.50 -1.14%
CAD 1.0137 1.0270 -1.31%
NZD 0.8414 0.8421 -1.91%
AUD 1.0503 1.0275 -2.17%
# Comment – The mood last week was decidedly “risk-off” as equities and commodities sold off in some of the biggest moves since the start of 2013. The USD was the main beneficiary of the move out of risk – as the JPY no longer holds a safe-haven status. Not surprisingly – the “risk/commodity” currencies, the AUD, NZD and CAD were the worst performing.
# Commodities were mixed with gold stabilizing and closing above 1,400 for a 0.95% gain; U.S. Crude rose 0.32% while Copper continued to underperform – falling 1.38% and closing below 7,000 – the first time it had a weekly close below 7,000 in almost three years. Iron Ore fell slightly to 138.43 from Thursday’s close at 138.85. For the week gold fell 5.04%; Brent Crude fell 3.36%; U.S. Crude fell 3.59%; Copper fell 5.82% and Iron Ore fell 2.58%.
# Italian and Spanish bond yields continued to edge lower as yield seeking investors are happy to ignore political and economic negatives for the time being. The 10-year Italian bond yield eased to 4.22% from 4.25% while the 10-year Spanish debt yield closed at 4.63% down from Thursday’s close at 4.66%. Clearly participants here see a much increased chance of a forthcoming rate cut out of the Eurozone.
Ahead
Key data in the week ahead The key US data in the week ahead will be Q1 advanced GDP on Friday, which is expected to come in at a healthy 3.0%. Other US data includes Existing Home Sales; New Home Sales; Durable Goods and Univ of Mich Sentiment Index. Key EZ data includes advances MFG PMI data on Tuesday and German IFO on Wednesday. HSBC Flash China MFG PMI is out on Tuesday and will be a key event in Asia. The BoJ meets again Thursday/Friday and the RBNZ announces on Wednesday.
Cheers G.
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Overnight Points of Interest
2013 April 19 by Graham
Good Friday morning
Overnight
# European stocks spent most of the evening in positive territory up around 0.5% before poor U.S. data sent the EuroStoxx600 to a perfectly flat close (0.00% change). Stateside it was generally just down, after a full slate of uninspiring corporate earnings and a weaker than expect Philly Fed survey, before a mild recovery in the last hour saw the S&P500 close down 0.67%
# The U.S Philadelphia FED Survey of Manufacturing showed general business activity within its regional factory sector slowed to 1.3 in April from 2.0 in March. Economists had expected little change at 2.5. The Philadelphia report follows another survey showing an April slowdown in manufacturing. On Monday, the New York Fed said its survey of regional factories showed conditions slowed significantly this month but remained in expansionary territory.
# The NZD was strangely the weakest of the G-10 currencies despite yesterday’s robust ANZ-Roy Morgan confidence survey. The reading of 119.20 from 114.8 in March puts the index back above its 10-year average of 117.5. Overall, confidence levels suggest solid real spending growth ahead to the tune of about 3% pa. The NZD/USD traded as low as 0.8400 whilst NZD/AUD could not hold its brief foray above 0.8200 and has slumped back to near support at 0.8160.
# Despite the generally dour tone of recent sessions Spain surprisingly managed to sell 10-year bonds at the lowest yield since September 2010. It would appear the appetite for ‘peripheral’ European debt may be tied to the growing expectation of further monetary easing in the Eurozone following Bundesbanker Weidman’s comments earlier in the week.
# Bolstering the ECB easing talk IMF Managing Director Christine Lagarde said that the ECB is the only central bank with “a bit of space” to cut rates.
# U.S. Jobless Claims were largely unchanged coming in at 352k against expectations of a 350k result.
# Gold ground higher but the gains are miniscule in relation to the hammering the precious metal has had in recent days. Currently Gold sits at US$1,390.00 well off its US$1,321 lows earlier in the week.
Ahead
# G-20 Meetings
# IMF Meetings
Cheers G.
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
Overnights Points of Interest
2013 April 8 by Graham
Good morning
Overnight
# The Non-Farm Payrolls data out of the U.S sent stocks sharply lower Friday however by the end of stateside trading U.S. bourses had recovered reasonably strongly. The EuroStoxx600 fell a hefty 1.57% and the S&P500, after being down well over 1.0% closed down only 0.43%.
# The U.S payroll data was a mixed bag but the bones of the data were undeniably weak. A rather anaemic 88,000 new jobs were created against an expectation of near 200k. There were two positive data points: jobs gains for February were revised upward to 268,000 from an initial 236,000, and in January to 149,000 from an initial 119,000. However, the real kicker was the participation rate which fell to a 40-year low of 63.3 % last month, from 63.5 % the month before. The unemployment rate fell to 7.6 % from 7.7 %, but only because 496,000 Americans stopped looking for work. Total unemployment remains at about 3 million fewer jobs than at the pre-recession peak. The worry here is that if all the people that could work, returned to looking for work, the unemployment rate would be massively higher.
# The USD was a very mixed bag in the wake of the numbers, hit hard against GBP and EUR, but improving strongly against JPY whilst against the NZD and AUD it was largely unchanged. The AUD weakness, that I’ve been suspecting to arrive, was evident as NZD/AUD rose strongly over the week from 0.8020 to 0.8120 whilst against the EUR the AUD was smashed over the course of the week from 0.8180 to 0.7960.
# The JPY continued to be a major story with USD/JPY now up an incredible 600 points from Thursdays BOJ ‘shock and awe’ announcement. The JPY weakness promoted NZD/JPY to 5 year highs above 82.50.
# Best to worst performing currencies last week
CCY Mar29 Apr5 %Change
CHF 0.9494 0.9355 1.46%
EUR 1.2819 1.2994 1.37%
GBP 1.5191 1.5340 0.98%
NZD 0.8366 0.8432 0.79%
CAD 1.0173 1.0175 -0.02%
AUD 1.0416 1.0378 -0.36%
JPY 94.28 97.56 -3.48%
# Key commodities continued to perform poorly due to global growth concerns – with copper falling 0.46%. U.S. Crude fell 0.60% while Brent Crude fell 2.09% to 104.12 – its lowest daily close since July 24 last year. Gold managed to claw back almost all of the hefty losses incurred earlier in the week, as the promise of on-going Fed QE and the extremely aggressive BOJ QE brought Gold buyers back into the market. Gold stormed 1.85% higher to close at 1,581. Iron Ore was steady – rising 0.22% to 135.90.
# Peripheral debt yields in the Eurozone continued to calm and move lower, as the Cyprus contagion fears continued to fade and investor faith in the ECB to do what is needed encouraged buying of Italian and Spanish bonds. Analysts also noted that the very cheap money on offer from Japan and the US encouraged riskier bond buying. The 10-year Italian bond yield plunged to 4.38% from 4.56% at Thursday’s close – while the Spanish 10-year bond yield fell to 4.76% from 4.93% at Thursday’s close.
# S&P affirms UK AAA rating, outlook remains negative due to outlook for weaker economic
Ahead
http://www.forexfactory.com/calendar.php
Cheers G
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Overnight Points of Interest
2013 April 5 by Graham
Good Friday morning
Overnight
# European stocks fell on comments from ECB President Draghi however U.S. stocks are making a better fist of things. The EuroStoxx600 ended down 1.05% whilst the S&P500 ended up +0.40%
# The ECB President, after leaving the benchmark borrowing rate at 0.75%, said that the Eurozone was at risk of a deeper recession. Mr. Draghi acknowledged that the recovery in the second half of the year is still at risk of being thrown off course. He also took time to stress the Cyprus bailout should not be seen as a template for future bailouts.
# The BOE opted not to pump new money into Britain’s stagnant economy, despite a remit that gives it clearer leeway to disregard above-target inflation. The central bank said it would not add to the £375bn of government bonds it purchased from March 2009 to October 2012, and would keep interest rates at a record low of 0.5%.
# The big news in central banking was of course the first Bank of Japan meeting under the leadership of new chief Kuroda late yesterday. The new Governor chose the ‘shock and awe’ route, trumping all market expectations as to what the easing program would be going forward. The BoJ intends to raise its monthly bond purchases to ¥7t vs. an estimate of ¥5.2t. It also intends to buy longer-dated bonds with maturity up to 40-years, helping to flatten the curve. It also announced a highly ambitious two year goal for achieving its new 2% inflation target. USD/JPY roared from below 93.00 to nearly 96.50 and sits close to the highs now.
# U.S jobless claims rose as the number of Americans seeking unemployment aid rose to a four-month high last week. Weekly applications increased 28,000 to a seasonally adjusted 385,000. That is the highest level since late November. The four-week average, a less volatile measure, rose to 354,250. This development is all the more worrying in the context of yesterday’s weak ADP report.
# The AUD, despite strong data yesterday, showed distinct weakness on the crosses suggesting the recent losses in base metals may be weighing. Against the EUR the AUD fell from almost a cent from 0.8160 to 0.8070 (see yesterday’s Charts of Interest) whilst the NZD/AUD cross rose from 0.8025 to 0.8070.
# Crude Oil dropped sharply for the 2nd day in a row shedding almost 5% over the period. The weak employment data added to the generally weaker data tone seen lately and suggesting demand may wane whilst supply rises to multi decade highs .
# Gold plumbed new 10 month lows, and like crude, has shed nearly 5% over the last few days. Global holdings of exchange-traded products backed by gold are down 7.4% this year, while the MSCI All- Country World Index of equities advanced 5 %. Simply put the resilience of the financial system, in the face of events like Italy and Cyprus, has reduced the safe haven appeal of gold whilst the strong equities rally simply attracts more capital. Gold stopped just short of the crucial US$1,530/35 area at $1,540 before bouncing to $1,553.00
# U.S 10 Year Treasury yields dropped to the lowest levels of the year at 1.76% in response to the weak jobs data and aggressive easing by the BOJ
Ahead
# BOJ Gov Kuroda Speaks
# Eurozone Retail Sales
# U.S Non-Farm Payrolls
# U.S Consumer Credit
Good weekend all
G.
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Overnight Points of Interest
2013 April 3 by Graham
Good morning
Overnight
# European stocks rose sharply as the new quarter spurred fresh position taking and merger and acquisition news (M&A) boosted sentiment. The EuroStoxx600 ended up a healthy 1.27%. Stateside, stocks are giving back early gains as we head into the close with the S&P500 ending up 0.50%, a new all-time closing high.
# Shares of Vodafone rose 2.9% to the highest level in more than five years, as the Financial Times reported that Verizon Communications and AT&T T are working on a bid for the U.K. telecommunications firm. At that the rumoured priced, about 260p per share, the deal would be the biggest acquisition ever. It would dwarf the previous M&A record holder, AOL’s $182bn takeover of Time Warner in 2000.
# The NZD was the strongest of its peers as Global Dairy prices hit a new record high, after rising 14.2% on average since the previous auction a fortnight ago. This is the third consecutive auction with double digit price gains, as the short supply of product squeezes prices upward. Dairy prices have more than doubled since the mid-May 2012 low. The strength was particularly evident against the GBP after data showed the UK manufacturing sector shrinking more than anticipated in March with UK PMI coming in at 48.3 vs. 48.7 expected. NZD/GBP now sits at a new post float high of 0.5575.
# The final reading of Eurozone Manufacturing PMI fell to 46.8 points last month, up from an initial estimate of 46.6, but well short of the already-weak 47.9 points posted in February. The downturn in the 17-nation Eurozone’s manufacturing sector deepened sharply last month, with even powerhouse Germany dragged down, the key indicator showed. The outcome left the closely followed indicator at a 3 month low and firmly below the 50-points boom-bust line since August 2011.
# Unemployment across the 17 European Union countries that use the Euro has struck 12 % for the first time since the currency was launched in 1999. Over the month, a net 33,000 people in the Eurozone joined the ranks of the unemployed. Spain and Greece continued to suffer from unemployment rates above 26 %, and many other countries were seeing their numbers swell to uncomfortable levels. Showing how Germany, Europe’s biggest economy, has benefitted from the single currency union their unemployment rate is only 5.4% significantly better than the U.S. rate of 7.7 %.
# Orders for US Factory Goods escalated in February on aircraft and car bookings even as the business spending indicator declined, pointing to a mixed picture of the country’s manufacturing sector. Orders for manufactured goods rose 3 %, following a 1 % decline in January, which was better than initially reported.
# Gold tumbled the most in more than 5 weeks (Silver lower for the ride too!) as physical demand ebbed and a stronger dollar trimmed demand for the precious metal as an alternative investment. Adding to the bear sentiment Societe Generale SA analysts said Gold is in a bubble and will head into a so-called bear market as improving U.S. economic growth prompts the Federal Reserve to curb stimulus efforts. The U.S. Mint sales of American Eagle gold coins slumped 23 % in March from a month earlier to 62,000 ounces. Gold fell 1.6 % to settle at $1,575.90 an ounce the biggest decline since Feb. 20. Prices have fallen 6 % this year, after 12 straight annual gains.
# Various FED speakers were somewhat contradictory with the Fed’s Kocherlakota repeating call for more monetary accommodation, again urging the Fed to vow low rates until unemployment falls to 5.5% whilst the Fed’s Lockhart said the central bank could begin to curtail asset purchases later this year or early next year without harming economic momentum.
Ahead
# Australian New Home Sales
# Australian Trade Balance
# China Non-Manufacturing PMI
Regards and have great (trading) day
G.
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities