Market Update 04/12/13

One line- Momentum continues to slow in the markets ahead of data releases later in the week.

- Trading is cautious this morning following a mixed session in Asia and a minor sell off in America. The yen continued to weaken but comments by Takehiro Sato, a BoJ board member, that further easing would be counter-productive caused the Nikkei to sell off 2.2%. European stocks have opened up this morning following their biggest decline in three months yesterday as the rally of the last few weeks begins to lose momentum. Currencies are quiet while commodities are mixed. WTI is up 1.3%, gold is off 0.6% while copper is up 0.2%. Rates are trending higher following a better than expected US manufacturing survey on Monday boosting tapering expectations. Ahead today we have Eurozone GDP figures and the US Federal Reserve Beige Book release. http://www.ft.com/cms/s/0/7f406126-5c95-11e3-b4f3-00144feabdc0.html?siteedition=uk#axzz2mUvBwAtP

- China's HSBC services PMI showed a figure of 52.5 in November indicating steady growth for the sector. The figure signalled the third consecutive month of employment expansion but growth in new orders fell from October's seven month peak. The services industry accounted for 45% of China's GDP in 2012 and overtook manufacturing to become the country's largest employer in 2011. http://www.reuters.com/article/2013/12/04/us-china-economy-pmi-idUSBRE9B304420131204

- Shinzo Abe is forming a $182 billion stimulus package to be approved by the government this week that will not require the government to sell any more debt. The bulk of the package is aimed at dampening the blow from the sales tax hike which is coming in in April. The measures include steps to boost competitiveness, assist women, build infrastructure for Tokyo 2020 and accelerate reconstruction from the 2011 tsunami. http://www.reuters.com/article/2013/12/04/us-japan-economy-stimulus-idUSBRE9B21AI20131204

- Ukrainian prime minister Azarov survived a vote of no-confidence yesterday as mass demonstrations continue over the withdrawal of Ukraine from a pact to bring it closer to Europe. The vote which required 226 politicians to support the motion received only 186 in support. Opposition leaders are now calling on the president Yanukovich to fire the prime minister and hold snap parliamentary and presidential elections. http://www.ft.com/cms/s/0/d1f11bf8-5c0f-11e3-931e-00144feabdc0.html#axzz2mUvBwAtP

- Australia's economy grew at a disappointing 2.3% in the third quarter (yoy) missing forecasts and the slowest figure this year. The country is continuing to come to grips with the loss in demand for commodities from China and the subsequent slump in prices. http://on.ft.com/1g4qmeb

Data

S&P 1795.15 0.32%

FTSE 6534.27 0.03%
Nikkei 15,407.94 2.17%

EUR/USD- 1.3591 0.02%
USD/JPY- 102.62 0.11%
GBP/USD- 1.6360 0.19%

Gold- 1215.72 0.63%
Oil (Brent)- 112.36 0.23%

Copper- 317.85 0.35%

 

10 year yields

US- 2.80 (+1bps)
UK- 2.83 (+2bps)
Japan- 0.62 (0bps)