Market Update 29/11/13

One line- Equity markets mixed while rates move up and dollar weakness supports commodity prices. 

- US markets were closed yesterday for Thanksgiving while Asian markets were mixed overnight. The FTSE has opened up 0.2% this morning. The Nikkei lost 0.4% yesterday coming off a near six year high as Japanese industrial figures disappointed on the downside showing just 0.5% growth month on month compared with a 2% estimate. The dollar sold off slightly while the euro is in the spotlight today ahead of the areas inflation data released today. The weaker dollar is supporting commodity prices with gold advancing with industrial metals and oil. Yields edged higher as the markets look forward to potential tapering. http://www.ft.com/cms/s/0/7c5057a8-58a5-11e3-9da6-00144feabdc0.html#axzz2lvuZmraP

- The Japanese CPI measured 0.9% for the month of October in line with expectations. The measure without energy costs comes in at 0.3% the highest since 1998. The news is positive at a time when some Japanese central bankers are concerned about the achievability of their 2% inflation target. Two bankers have raised concern that the figure is driven mostly by a weakening yen and that the lack of basic wage increases is worrying. http://www.ft.com/cms/s/0/4712e182-588c-11e3-9da6-00144feabdc0.html#axzz2lvuZmraP

- In continuing aggravation the Chinese flew fighter jets through the disputed air zones in the East China Sea. Colonel Shen Jinke said several fighter planes and an early warning aircraft have been deployed as a "defensive measure and in line with international common practices". Joe Biden on a trip to China next week is expected to put pressure on the authorities to step down the hostility. http://www.ft.com/cms/s/0/08c78be0-5809-11e3-a2ed-00144feabdc0.html#axzz2lvuZmraP

- Euro area unemployment unexpectedly dropped in October from 12.2% to 12.1% while inflation quickened to 0.9%. While the news is good recent growth figures have been disappointing with third quarter growth down at 0.1% from 0.3% in the second quarter. Italy's youth unemployment rose to 41.2% while Spain's reached a record 57.4%. http://www.bloomberg.com/news/2013-11-29/euro-area-unemployment-unexpectedly-drops-amid-recovery.html

- UK house prices have gained at their fastest rate in more than three years for this month according to mortgage lender Nationwide. The growth year on year has been 6.5% at a time when the Bank of England is looking to slow down its inflation of the housing market by ending its Funding for Lending Scheme. http://uk.reuters.com/article/2013/11/29/uk-britain-property-nationwide-idUKBRE9AS04R20131129

Data

S&P closed

FTSE 6668.37 0.21%
Nikkei 15,661.87 0.41%

EUR/USD- 1.3612 0.04%
USD/JPY- 102.25 0.08%
GBP/USD- 1.6326 0.10%

Gold- 1246.62 0.16%
Oil (Brent)- 110.94 0.07%

Copper- 321.40 0.74%

 

 

10 year yields

US- 2.75 (+2bps)
UK- 2.74 (+1bps)
Japan- 0.60 (+1bps)