It was a quiet day for economic data last night. That said, the sole pending home sales figure far exceeded forecast and printed an increase of 3.4% versus 1% from last month. This drove markets higher, but was not enough to sustain initial gains through closing. Overall the DJIA was up 0.53% (+87.28), the S&P 500 up 0.32% (+6.03) while the Nasdaq dropped 0.03% (-1.16). Pfizer led gains of 4.2% on the Dow as talks of a fresh bid for AstraZeneca resurfaced, after a failed attempt in January. Pfizer’s initial offer of £58.8bn was considered to significantly undervalue the UK-based pharmaceutical company. If the merger were to go through, it would be the largest foreign takeover of a UK firm. AstraZeneca’s stock price was up 12.16% at closing. The defensive tone in the high-growth tech sector continued as names like Facebook, Amazon, Zynga,, and LinkedIn dragged on the Nasdaq, while old names like IBM, Microsoft and Apple rose.


In the currency space, New Zealand announced a positive trade balance this morning, but this was not significant as the Kiwi continued its descent from a recent high past 0.87 towards a key support level of 0.85. If broken, there may be more downside. The euro has rallied in the last six sessions, climbing towards the 1.39 levels. It looks likely to continue should German CPI do well later this afternoon. USD/JPY rose overnight due to higher US yields. Japan’s retail sales printed slightly better yesterday, as expected, because households were spending more in March before the sales tax hike was implemented in April. It is likely that number will fall after April. Japan is on holiday, celebrating Showa Day and it’s unlikely we will see significant movements in the yen today.


The pound has been flirting with all-time highs recently and looks comfortable above the 1.68 level for now. The UK will be reporting quarterly GDP at 4.30pm Singapore time and if this surprises on the upside, GBP/USD may rally to test the 1.69 level later today. Looking forward, the US will be releasing consumer confidence numbers and the earnings season continues with Twitter and eBay rolling out quarterly results. Investors should be cautious, having seen a pullback in momentum tech/internet counters in recent trading.

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