t’s a sign of the times that with so many central banks leaning toward further easing or delaying tightening moves that central banks currently in neutral like the RBA and RBNZ have come off as hawkish relative to their peers. AUD and NZD have continued to outperform most other majors overnight and may be active again today. Australia’s improved service PMI plus trade data could keep AUD active while the Kiwi Dollar could attract trading interest off of New Zealand’s better than expected job numbers.
US and European markets have been choppy today. European indices gave back some of their recent gains as speculation on an ECB interest rate cut Thursday cooled a bit with traders unwilling to get caught out on a limb just in case nothing happens. The UK, meanwhile outperformed the continent today with the FTSE falling less than its peers and GBP leading its class today on the back of better than expected UK construction and service PMI numbers that suggest the summer strength has continued into the autumn. Both the Bank of England and ECB have meetings Thursday morning, but it’s possible that they could end with very different results.
Action in the US, meanwhile, has been indecisive. The Dow started down about 100 points, clawed it all back, then faded into the close. Trading was choppy around the non-manufacturing PMI number which came in a bit better than expected but not a total blowout number like the Chicago or New York PMIs of recent days. FOMC members speaking this week have indicated that they remain data driven putting more focus on Friday’s nonfarm payrolls which trumps PMI numbers in importance. Unless we get a big positive surprise on jobs, a December taper remains unlikely.
This also remains an active week for stocks. Tesla Motors may be active off its earnings report today before turning the stage over to Twitter’s IPO and trading debut. The IPO price has been raised once already and demand is apparently running high which suggests it could get off to an active start.
Tesla Motors EPS ex items $0.12 vs street $0.08, sales $602 million vs street $547 million. Guided Q4 EPS similar to Q3 short of street $0.20. Q4 production of 6,000 cars essentially in line but no guidance for 2014 production.
Hasbro Restated Q3 earnings to take a $75 million charge cuts EPS by $0.50 per share to $0.96
Highlights of overnight announcements include:
NZ unemployment rate 6.2% vs street 6.3%
NZ Q3 employment change 1.2% vs street 0.6%
Service PMI reports include:
US 55.4 vs street 54.0
Australia 47.9 vs previous 47.1
Singapore electronics 51.0 vs street 50.9
Singapore PMI 51.2 vs street 51.0
UK 62.5 vs previous 60.3
Brazil 52.1 vs previous 50.7
Upcoming significant announcements include:
11:30 am AEST Australia trade balance street ($500M)
8:00 am GMT UK Halifax house prices street 7.0%
9:30 am GMT UK industrial production street 1.8%
9:30 am GMT UK manufacturing production street 0.8%
10:00 am GMT Eurozone retail sales street 0.6%
3:00 pm GMT UK NIESR GDP estimate previous 0.8%
7:30 am EST US Challenger layoffs
10:00 am EST Canada PMI street 52.0
10:00 am EST US leading index street 0.6%
10:30 am EST US crude oil inventories street 2.1 mmbbls
10:30 am EST US gasoline inventories street (0.4 mmbbls)
The remaining Service PMI reports are due today including:
8:15 am GMT Spain street 49.0
8:45 am GMT Italy street 51.2
8:50 am GMT France street 50.2
8:55 am GMT Germany street 52.3
9:00 am GMT Eurozone street 51.5