Market Update 16/09/13

One line- Global stocks rally while the dollar and gold declines on the news that Larry Summers is out of the running for Federal Reserve Chairman and that Syria will disarm peacefully. 

- Larry Summers took himself out of the running to be Federal Reserve Chairman yesterday in the face of strong opposition from some Democrats. Larry was the front runner in a two horse race with Janet Yellen and is seen as more hawkish. http://www.ft.com/cms/s/0/8a46d28a-1e47-11e3-85e0-00144feab7de.html#axzz2f2pLDFdy

- The dollar weakened while global stocks have rallied with Treasuries on the news that Summers has taken himself out of the running for Federal Reserve Chairman. Hong Kong's Hang Seng rose 1.4% overnight while 10 year Treasury yields fell 8 basis points to 2.8%. http://www.bloomberg.com/news/2013-09-15/dollar-sinks-on-summers-as-australian-index-futures-climb.html

- US bond investors are expecting a small reduction in bond purchases to be announced this week by the Federal Reserve. Markets have priced in a $5 to $10bn reduction in the Feds $85bn monthly purchases. http://www.ft.com/cms/s/0/77808e10-1cc2-11e3-a8a3-00144feab7de.html#axzz2f2pLDFdy

- Gold declined in London this morning as the US, Russia and Syria reached an agreement for Syria to disarm its chemical weapons. WTI extended its biggest weekly drop since July on the news falling to $106.63 http://www.bloomberg.com/news/2013-09-16/gold-declines-in-london-as-haven-demand-subsides-on-syria.html  http://www.bloomberg.com/news/2013-09-15/wti-extends-biggest-weekly-loss-since-july-on-syria-arms-plan.html

- Emerging market currencies were buoyed by the news about Summers with the rupee, the rupiah and the lira all gaining at least 1% overnight. http://www.ft.com/cms/s/0/d759ec54-1e9e-11e3-b80b-00144feab7de.html#axzz2f2pLDFdy

Data

S&P 1687.99 0.27%
FTSE 6637.23  0.81%
Nikkei Not Trading

EUR/USD- 1.3343 0.37%
USD/JPY- 98.89 0.49%
GBP/USD- 1.5928 0.33%

Gold- 1318.58 0.57% 
Oil (Brent)- 110.32 1.24%

Copper- 321.65 0.41%

10 year yields
US- 2.82 (-7bps)
UK- 2.87 (-4bps)
Japan- 0.72 (0bps)