Market Update 28/11/13

One line- Market moves risk on on the back of positive US data.

- US stocks rose yesterday reaching record highs as jobless claims fell unexpectedly and consumer confidence beat estimates, Treasuries sold off as did crude oil on increased supply. The yen continued to weaken helping push the Nikkei up 1.8% while European stocks are up this morning with the FTSE adding 0.4%. Gold is under pressure as investors move to riskier assets. The dollar is little changed. http://www.bloomberg.com/news/2013-11-26/nikkei-futures-fall-on-yen-rebound-as-crude-extends-drop.html http://www.ft.com/cms/s/0/8a26a34e-57df-11e3-b615-00144feabdc0.html#axzz2lvuZmraP

- German unemployment rose for a fourth month in November hitting 2.985 million with a rise of 10 000 unemployed. The jobless rate remains unchanged at 6.9%. Sluggish third quarter growth of 0.3% was driven entirely by domestic demand while 0.4% growth is predicted for for the last quarter. The figures support the ECB decision to reduce rates and make the case that perhaps more dynamic measures need to be introduced to the region. http://www.bloomberg.com/news/2013-11-28/german-unemployment-rises-for-a-fourth-month-in-uneven-recovery.html

- Brazil has been forced to increase its benchmark rate by 50 basis points to 10% as the country grapples with inflation as well as declining growth. The move is part of what is currently the worlds biggest tightening cycle with rates having risen 275 basis points since April this year. Inflation stands at 5.8% down from 6.5% in June but still ahead of the 4.5% target the central bank has. http://www.ft.com/cms/s/0/fb86cf18-57bd-11e3-b615-00144feabdc0.html#axzz2lvuZmraP

- Silvio Berlusconi has been ejected from the Italian Senate as a result of his conviction of tax fraud. Still defiant Berlusconi proclaimed "a day of mourning for democracy". His conviction of tax fraud forces him to spend one year under house arrest or through community service. He is banned from public office for 6 years following an anti corruption law passed in 2012. http://www.ft.com/cms/s/0/a029ba7e-5757-11e3-9624-00144feabdc0.html#axzz2lvuZmraP

- Japanese and South Korean planes have been flying through the Chinese new defence zone over the disputed islands in the East China Sea, without informing China. Earlier in the week the Chinese government stated that it would take defensive action against any unidentified planes flying over the area. The move by Japan and South Korea follows the American lack of recognition for the Chinese claim when they fly two B52 bombers over the area. http://uk.reuters.com/article/2013/11/28/uk-japan-china-idUKBRE9AR0AF20131128

Data

S&P 1807.23 0.25%

FTSE 6678.30 0.43%
Nikkei 15,727.12 1.80%

EUR/USD- 1.3600 0.15%
USD/JPY- 102.19 0.03%
GBP/USD- 1.6317 0.18%

Gold- 1242.31 0.36%
Oil (Brent)- 111.00 0.28%

Copper- 319.25 0.06%

 

 

10 year yields

US- 2.74 (0bps)
UK- 2.77 (0bps)
Japan- 0.60 (0bps)