Market Update 12/0/9/13

One line- Market focus shifts from positive Chinese economic data and the easing of the Syria situation to the potential tapering next week.

- The equity rally that begun at the start of the week has lost momentum as traders look ahead to next weeks potential tapering announcement. Weekly jobless claims for the US are announced today. The S&P added 0.3% yesterday while the Nikkei lost 0.3% as the Yen strengthened below Y100 vs the dollar.  http://www.ft.com/cms/s/0/d439a868-1b59-11e3-b781-00144feab7de.html?siteedition=uk#axzz2eNo4QzxI

- European stocks opened up this morning as investors expressed confidence that the region's economy was improving. Unemployment increased in Australia rallying their bonds and sliding the Aussie dollar. Gold continued its slide as fears over a military strike in Syria subsided. http://www.bloomberg.com/news/2013-09-11/australian-index-futures-rise-as-kiwi-gains-oil-rebounds.html

- Emerging markets have had their biggest rally of the year so far gaining 6.3% in the last 6 days. Positive economic data from China and the easing of the situation in Syria has driven the gains. Despite this emerging stocks are still down 6% year to date. http://www.bloomberg.com/news/2013-09-11/emerging-stocks-seen-overbought-as-jump-makes-brazil-bull-market.html

- The Chinese premier Li Keqiang has committed to overhauling state-dominated financial institutions, to free up interest rates and to allow the renminbi to float- a big step towards the liberalisation of the Chinese financial markets. http://www.ft.com/cms/s/0/43fb452e-1adf-11e3-87da-00144feab7de.html#axzz2eNo4QzxI

- Unemployment dropped unexpectedly in the UK to 7.7% in the three months to to July. Ahead of Mark Carney testifying before parliament today UK gilts have rallied and the pound slid from a seven month high vs the dollar at $1.5789. http://www.bloomberg.com/news/2013-09-12/pound-reaches-seven-month-high-before-boe-carney-s-testimony.html

Data

S&P 1689.13 0.31%
FTSE 6581.95  0.10%
Nikkei 14,387.27 0.26%

EUR/USD- 1.3291 0.15%
USD/JPY- 99.51 0.38%
GBP/USD- 1.5813 0.03%

Gold- 1342.58 1.66% 
Oil (Brent)- 112.09 0.53%
Copper- 322.85 0.88%

10 year yields
US- 2.89 (-2bps)
UK- 2.97 (-3bps)
Japan- 0.72 (-1bps)