Market Update 22/11/13

One line- Global stocks rally sparked by positive US economic data, rates halt their sell off while commodities are mixed.

- US equity markets rallied yesterday on encouraging inflation and labour market figures and the momentum continued through Asia. The S&P added 0.8% and the Nikkei added 0.1%. The yen continued to sell off falling to a 6 month low of 101.33 vs the dollar. In Australia the S&P/ASX added 1% as the aussie dollar slid to a two month low of $0.9164. European stocks are up this morning ahead of expectations that data released today will show German business confidence increased. Metals are marginally higher while Brent has sold off 0.34%. Rates are virtually unchanged following the sell off on the Fed minutes. http://www.ft.com/cms/s/0/0f92c230-5329-11e3-8586-00144feabdc0.html#axzz2lB9GOvWf

- RBA governor Glenn Stevens has said he is open minded about currency intervention but that the currency would have to be "seriously overvalued" for him to consider it. The RBA has cut rates by 2.25% in the last two years to 2.5% as it looked to boost industries hurt by the currencies strength. The IMF believes the Aussie dollar is about 10% overvalued.  http://www.bloomberg.com/news/2013-11-21/stevens-says-rba-open-minded-on-fx-intervention-after-inaction.html

- Germany showed a 0.3% expansion in the third quarter helped by strong domestic demand that overshadowed weak export performance.The European Commission is currently reviewing Germany's persistently high current account surplus amid concerns that it relies too heavily on exports, but figures released today showed that trade had a 0.4% net negative effect on growth. http://uk.reuters.com/article/2013/11/22/uk-germany-economy-idUKBRE9AL07M20131122

- The WTO is on the verge of sealing the first global trade pact in more than ten years as the US, China and India put aside differences they have on agriculture. The deal could potentially add $1 trillion in trade to the current $18 trillion per year figure. The deal makes progress on bureaucratic barriers at borders, agricultural and developmental issues. http://www.ft.com/cms/s/0/34eef340-52da-11e3-a73e-00144feabdc0.html#axzz2lB9GOvWf

- Italy and Spain will face questioning over their 2014 budget plans at meeting of finance ministers today. Following the easing of bond market pressure over the last 18 months concern is growing that peripheral country's are beginning to become complacent. This comes at a time when European growth was just 0.1% for the third quarter down from 0.3% in the second. Unemployment is at a record high of 12.2%. While the EU doesn't have the power to veto a country's budget the European Commission hopes to pressure finance ministers into prudent choices. http://www.bloomberg.com/news/2013-11-22/italy-spain-face-budget-scrutiny-as-euro-finance-ministers-meet.html

Data

S&P 1795.85 0.81%

FTSE 6689.86 0.13%
Nikkei 15,381.72 0.10%

EUR/USD- 1.3515 0.24%
USD/JPY- 101.13 0.03%
GBP/USD- 1.6195 0.03%

Gold- 1244.14 0.10%
Oil (Brent)- 109.78 0.27%

Copper- 321.85 0.61%

 

 

10 year yields

US- 2.79 (0bps)
UK- 2.83 (+1bps)
Japan- 0.62 (0bps)