Market Update 05/09/13

One line- Positive economic data driving equity gains while Treasuries continue to sell off.

- US stocks advanced yesterday as the Fed's Beige Book said the US recovery was moderate with increased spending on cars and housing helping to drive growth. The Senate took the first step to authorising military action against Syria when a committee voted in favour, the margin of victory though was narrow. http://www.bloomberg.com/news/2013-09-04/u-s-stock-index-futures-are-little-changed.html  http://uk.reuters.com/article/2013/09/05/uk-syria-crisis-idUKBRE97S0LQ20130905

- European stocks advanced with Asian stocks ahead of key central banking meetings today. The ECB and the Bank of England are both meeting and both are expected to keep monetary policy constant.  http://www.bloomberg.com/news/2013-09-05/european-stock-futures-gain-before-central-bank-meetings.html

- Treasuries are the world's worst performing bonds and their volatility has hit a 2 month high amongst tapering speculation. Pimco co CIO Mohamed El-Erian see's tapering beginning this month with a reduction in the Treasury purchases. http://www.bloomberg.com/news/2013-09-05/treasuries-worst-performer-as-pimco-forecasts-september-taper.html

- The Bank of Japan lifted its assessment of Japan's economy citing progress in its price target and inflation expectations. The Bank says the housing sector is looking stronger and exports have picked up increasing investment. http://www.ft.com/cms/s/0/11c67398-15db-11e3-b519-00144feabdc0.html#axzz2duTDeNw6

- The Aussie dollar rallied on positive growth data along with sterling and the euro. A strong survey from the services sector drove sterling 0.4% higher against a basket of currencies. http://www.ft.com/cms/s/0/d31b079c-157d-11e3-950a-00144feabdc0.html#axzz2duTDeNw6

- Gold fell for a second day on the back of tapering expectations and the limited level of Syria strikes that may occur.   http://www.bloomberg.com/news/2013-09-05/gold-climbs-as-obama-moves-closer-to-approval-for-syrian-strike.html

Data

S&P 1653.08 0.81%
FTSE 6525.86  0.79%
Nikkei 14,064.82 0.08%


EUR/USD- 1.3187 0.15%
USD/JPY- 99.88 0.14%
GBP/USD- 1.5614 0.08%

Gold- 1408.94 0.25%
Oil (Brent)- 115.71 0.03%
Copper- 326.70 1.13%

10 year yields
US- 2.93 (+3bps)
UK- 2.91 (+4bps)
Japan- 0.77 (+1bps)