Market Update 27/11/13

One line- Another slow trading day ahead of further US data releases and the Thanksgiving break.

- US stocks were flat yesterday and Asian shares were mixed with the Nikkei losing 0.4% while the Hang Seng added 0.5%. Trading is muted ahead of the Thanksgiving break and further US economic data releases. European stocks this morning are up as UK economic growth of 0.8% in the second quarter grew on housing and investment. Rates are slightly higher with the US ten year adding 2 bp to 2.72% which is helping to firm the dollar vs the yen which weakened 0.4%. Commodities are generally up with gold adding 0.46% and brent adding 0.35%. http://www.ft.com/cms/s/0/12b8579a-5716-11e3-ab12-00144feabdc0.html?siteedition=uk#axzz2leBNNo3r  http://www.bloomberg.com/news/2013-11-27/u-k-economic-growth-accelerates-on-investment-housebuilding.html

- The US made a statement to China yesterday by flying two B52 bombers across the disputed islands in the East China Sea. China has recently said it would establish an air zone over the islands to protect its territorial rights. Beijing has said it would take "defensive emergency measures" against any unidentified aircraft flying over the zone. The US insists the flights were a long planned training mission and that it would not change its operations in response to the Chinese's stance. http://www.ft.com/cms/s/0/b2a6c054-56c9-11e3-ab12-00144feabdc0.html#axzz2leBNNo3r

- Angela Merkel's Christian Democrats and the Social Democrats have agreed to a deal that looks to create a new government by Christmas. The deal spelled out in an 185 page document will not be final until approved by a postal ballot of 475000 SPD members. European leaders are relieved at the agreement as the lengthy talks have hampered reforms of the euro area including creating a banking union. http://uk.reuters.com/article/2013/11/27/uk-germany-coalition-idUKBRE9AQ04G20131127

- Iran's oil ministry is opening talks with contacts in major western companies as they look to the future to prepare for potential further lifting of sanctions. The oil minister Bijan Zanganeh is looking to reattract the kind of investment he managed in the 90's when in spite of sanctions he managed to persuade the likes of Total, Shell, Eni and Statoil to pump money into the region. http://www.ft.com/cms/s/2/2e341574-56ab-11e3-ab12-00144feabdc0.html#axzz2leBNNo3r

- Private equity has $789bn of dry powder on its balance sheets an increase of 12% since December 2012. Increased funding along with a decreased number of deals done is driving the figure which suggests possible over capacity in the industry. http://www.ft.com/cms/s/0/c6b67414-5691-11e3-8cca-00144feabdc0.html?siteedition=uk#axzz2leBNNo3r

Data

S&P 1802.75 0.13%

FTSE 6647.34 0.17%
Nikkei 15,449.63 0.42%

EUR/USD- 1.3605 0.24%
USD/JPY- 101.80 0.49%
GBP/USD- 1.6286 0.43%

Gold- 1251.12 0.67%
Oil (Brent)- 111.30 0.38%

Copper- 323.15 0.39%

 

 

10 year yields

US- 2.72 (+1bps)
UK- 2.74 (+1bps)
Japan- 0.60 (-1bps)