There has been a lot of news and rumours overnight, sending markets around the world heading in different directions. The biggest story in terms of market action, however, has been another pullback in USD.
In the absence of any major US news today and ahead of the ADP and nonfarm payrolls reports due tomorrow and Friday, USD and US stocks have been sliding back a bit this morning. The USD drop has been more pronounced and has enabled crude oil, grains and currencies to rally. NOK has been the biggest beneficiary, clawing back much of yesterday’s big losses on the back of Brent crude. AUD also has posted significant gains after the RBA held interest rates steady while keeping a neutral stance on future rate trends. Even its talk against the dollar was more moderate than recent statements.
European markets are also active today, EUR has also been one of the top performers with Greece and its creditor group submitting proposals to deal with the crisis. Getting all of the creditors to sing from the same song sheet has been seen as progress and both sides appear to be getting more serious about reaching a solution with top leaders apparently getting more involved. Greece is expected to make this week’s IMF payment but deal chatter could keep markets active for some time. Spain’s IBEX is up on positive employment figures while Germany’s Dax
is down on an employment miss.
Oil is up today despite more indications out of Saudi Arabia that it has no intention of cutting production at this week’s OPEC meeting as it is winning the supply war it unleashed last year. This suggests the oil rebound is more USD driven than supply/demand driven.
With all of the meetings and negotiations going on plus tons of economic news on the way, we could see more intraday reversals through the week like the one gold had yesterday, potentially creating opportunities for both bulls and bears.
There have been no major corporate announcements so far this morning.
Economic reports released overnight and this morning include:
Australia interest rate 2.00% no change as expected
India interest rate 0.25% cut to 7.25% as widely expected
Spain unemployment change (118K) vs street (116K)
Germany unemployment chnge (6K) vs street (10K)
Germany unemployment rate 6.4% as expected
Greece manufacturing PMI 48.0 vs previous 46.5
UK construction PMI 55.9 vs street 55.0
Eurozone consumer prices 0.3% vs street 0.2%
Eurozone core CPI 0.9% vs street 0.7%
Eurozone producer prices (2.2%) vs street (2.0%)
Upcoming significant announcements include:
9:00 am EDT Singapore PMI street 49.3
9:00 am EDT Singapore electronics street 49.5
10:00 am EDT US factory orders street (0.1%)
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