European markets fall moderately ahead of ECB base rate decision as UK chancellor gets ready to deliver his ‘Autumn’ speech

Dec 5 • Mind The Gap • 1586 Views • Comments Off on European markets fall moderately ahead of ECB base rate decision as UK chancellor gets ready to deliver his ‘Autumn’ speech

shutterstock_161029130Equity markets were weaker across the Asia-Pacific region and in Europe on Thursday. Investors are cautious ahead of interest rate decisions in the Eurozone and the UK on Thursday plus the highly-anticipated monthly NFP US jobs report due out Friday. The losses follow a 0.1 per cent pullback in the S&P 500 Wednesday, after a strong private payrolls survey increased speculation that the Federal Reserve could taper its stimulus measures known as quantitative easing.

The UK’s chancellor Osborne will deliver his autumn statement today claiming that a budget surplus is in sight for the first time since the millennium, raising Tory hopes of significant tax cuts in the next parliament after nearly a decade of austerity. The chancellor will deliver his Autumn Statement against a backdrop rising growth forecasts, which could see Britain to be back in the black by 2018-19.

Aussie trade deficit widens in October

In trend terms, the balance on goods and services was a deficit of $547m in October 2013, a decrease of $126m (19%) on the deficit in September 2013. In seasonally adjusted terms, the balance on goods and services was a deficit of $529m in October 2013, an increase of $258m (95%) on the deficit in September 2013. CREDITS (EXPORTS OF GOODS AND SERVICES) In seasonally adjusted terms, goods and services credits fell $26m to $27,273m. Rural goods fell $80m (3%) and non-rural goods fell $51m. Non-monetary gold rose $146m (12%) and net exports of goods under merchanting rose $15m (50%).

Market snapshot

The ASX 200 closed down 1.444%, the CSI down 0.28%, the Hang Seng down 0.07%, the Nikkei down 1.50%. In Europe the STOXX is down 0.14%, CAC down 0.15%, DAX down 0.04%, FTSE down 0.08%. The MSCI Asia Pacific Index of shares fell 0.3 percent after a 1.2 percent drop yesterday, the most since Sept. 30th.

Looking towards the USA bourses’ opening the DJIA future is down 0.06%, SPX future down 0.07%, NASDAQ down 0.01% suggesting USA markets will open down moderately.

NYMEX WTI oil is up 0.16% at $97.36 per barrel, NYMEX nat gas flat at $3.96 per therm. COMEX gold is down 1.18% at $1232.50 per ounce with silver down 1.66% at $19.50 per ounce.

Forex focus

The yen appreciated 0.4 percent to 101.93 per dollar early London time after rising 0.6 percent over the previous two days. It gained 0.2 percent to 138.87 per euro. The 17-nation shared currency rose 0.2 percent to $1.3624 after earlier touching $1.3639, the strongest since Oct. 31st. The yen strengthened for a third day versus the dollar and the euro as equities fell, boosting demand for the safety of the Japanese currency.

The pound weakened by 0.1 percent to 83.09 pence per euro early in London after dropping 0.2 percent in the previous two days. Sterling gained 0.1 percent to $1.6398. It rose to $1.6443 on Dec. 2nd, the highest since August 2011. The pound fell for a third day versus the euro before the Bank of England announces its policy decision, with economists forecasting it will keep interest rates at a record low and its bond-buying target unchanged.

The pound fell for a third day versus the euro before the Bank of England announces its policy decision, with economists forecasting it will keep interest rates at a record low and its bond-buying target unchanged Treasuries were the cheapest since September on speculation a U.S. employment report tomorrow will show growth in the labor market, while investors prepared to bid at note and bond auctions next week.

Bonds

Germany’s 10-year yield was at 1.81 percent early in London time. The rate climbed to 1.82 percent yesterday, the highest level since Oct. 22nd. The price of the 2 percent bund maturing in August 2023 was 101.69. Germany’s government bonds were little changed before the European Central Bank announces its monetary policy decision today.


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