US markets are closed for Thanksgiving, so be careful of unusual moves with the lighter trading volumes around this time. Those of you that celebrate it, Happy Thanksgiving to you. Elli. Markets Overnight Asian markets ended higher yesterday after the better than expected US growth data boosted sentiment, however the Nikkei fell in a choppy session with the yen strength weighing on the index after it fell below the 118 level after hitting the seven year high last week. Economic data due out Friday which includes inflation, household spending and industrial output also put a dampener on buying for the region. Oil continues to be a focus ahead of the OPEC meeting, and iron ore prices tumbled again, falling below $70 a ton for the first time since 2009. Shanghai finished 1.4% higher rising to a new three-year high for the fourth day running as the positive sentiment continues after the surprise central bank rate cut last week. The ASX also finished higher at a one-week high and the AUD recovered from a four year low overnight caused by the RBAs deputy governor Lowe calling the currency overvalued, causing an immediate dip in the currency which was short lived. After the close, the currency has dipped even further, hitting below the 0.85 handle and recovering shortly after. European markets closed mostly lower overnight, however the DAX continued its stellar run closing higher for its 10th straight session. Energy prices continued to weigh on indexes ahead of OPEC. Sentiment was boosted slightly from the US GDP results, capping losses. In economic news, UK GDP was confirmed at 0.7% compared to the year before, and French November consumer confidence rose slightly also. Talk continues to revolve around what the ECB may do next week at their governing council meeting. Draghi continues to speak with dovish words, and ECB Vice President Victor Constancio said the bank would have a clear picture on whether it should start buying sovereign bonds in the first quarter of next year to stimulate the euro zone economy (ie. QE). Keep in mind theyve already begun buying covered bonds and bundled loans (asset backed securities - ABS - and yes these are the same things that caused the GFC some time back……). In the meantime, EU Commission President Jean-Claude Juncker reviled an investment plan in Brussels that aims to allow the European Investment Bank to raise funds from private investors and invest in job-creating projects across Europe. US markets rose overnight with tech shares leading gains, whilst the energy sector weighed with the falling oil prices ahead of the OPEC summit as several leaders have stated that they will hold off making any major production cuts this week. The S&P and Dow both closed with record gains, despite weaker than expected economic reports placing weight on the dollar index which fell, but the fall was limited as expectations rose that the Fed may consider lifting short-term US interest rates in mid-2015. Treasury yields also fell to their lowest levels in over a month, whilst long-dated yields also hit fresh one-month lows with the weaker economic data. Durable goods rose in October, however core durable goods came in well below expectations at -0.9%. Unemployment claims rose last week considerably more than expected, and business activity in Chicago came in with a PMI reading of 60.8, again below expectations. New home sales dropped, as did pending home sales, and the revised Consumer Sentiment figures also hit below expectations. The Dow finished up 0.07%, the S&P up 0.28% and the Nasdaq up 0.61% ahead of the Thanksgiving holiday tomorrow, in which markets will be closed. Oil fell, and gold closed slightly lower in range-bound trade ahead of the Swiss referendum on bullion holdings. Major news today includes NZD, AUD, EUR and of course the OPEC meeting. US markets will be closed.
Posted on: Wed, 26 Nov 2014 23:28:11 +0000
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