Market Update 09/09/13

One line- Asian markets buoyed by positive Chinese economic data, European markets flat while US markets weigh the probability of tapering following poor jobs data.

- A disappointing US job report on Friday reduced expectations of September tapering causing US and European yields to fall. The consensus for August non farm payrolls was 180 000 with the figure coming in at a disappointing 169 000. The unemployment rate did fall but this was due to the participation rate falling to its lowest level since 1978. US stocks were flat on the news having gained 1.4% on the week. http://www.ft.com/cms/s/0/61d25664-1698-11e3-a57d-00144feabdc0.html?siteedition=uk#axzz2eNo4QzxI

- Japanese stocks jumped to 5 week highs buoyed by the news that Tokyo will host the Olympics in 2020. Upward revisions of Japanese second quarter growth from 2.6% annualized to 3.6% also assisted the rally of 2.2% for the Nikkei. Asian stocks continued an 8 day winning streak as China revealed August inflation was benign at 2.6% and export growth was 7.6%. http://www.ft.com/cms/s/0/55c1047a-18f9-11e3-83b9-00144feab7de.html#axzz2eNo4QzxI

- European stocks were little changed this morning on the back of the positive Chinese data. George Osborne gives a speech today on the UK economy and will promise to stick with the austerity plan the government has been implementing. http://www.bloomberg.com/news/2013-09-09/european-stock-index-futures-advance-before-syria-vote.html

- The yen slid overnight on the positive data from China as investors sought riskier assets. The Aussie dollar touched a three week high following the expected victory of Tony Abbott and his right wing coalition. The dollar initially strengthened as Syria intervention looked more likely following the G20 summit but has pulled back this morning. http://www.bloomberg.com/news/2013-09-08/yen-slides-on-tokyo-olympics-success-aussie-kiwi-gain-on-china.html

- While gold initially climbed on the weaker than expected US jobs data it has pared back those gains in London this morning suggesting the market is still expecting September tapering. http://www.bloomberg.com/news/2013-09-09/gold-declines-as-investors-expect-fed-to-press-on-with-tapering.html

Data

S&P 1655.17 0.01%
FTSE 6528.48  0.29%
Nikkei 14,205.23 2.48%
EUR/USD- 1.3189 0.08%
USD/JPY- 99.43 0.32%
GBP/USD- 1.5672 0.25%

Gold- 1387.56 0.30%
Oil (Brent)- 115.87 0.22%
Copper- 328.20 0.63%


10 year yields
US- 2.90 (-3bps)
UK- 2.94 (0bps)
Japan- 0.75 (-2bps)