A potential solution to the growing threat of force versus the Assad regime by the USA added calm to global equity markets. Added to this potentially positive news data published from China, suggesting that the Chinese economy is once again in growth mode, encouraged a ‘risk on’ sentiment to envelope global markets on Tuesday. China’s industrial production has increased by 10.4% year on year, whilst retail sales have grown 13.4%.
Market overview
The DJIA closed up 0.85% at 15,591, quite a reversal from threatening to breach the 200 SMA at circa 14,550 in the last week of August. The SPX closed up 0.73% and the NASDAQ closed up 0.62%. ICE WTI oil is down sharply at 1.94% as the threats reduced versus Syria, a barrel of WTI oil is now priced at $107.39. COMEX gold is flat at $1365.08, whilst silver is flat at $22.99 per ounce.
European markets enjoyed positive sessions on Tuesday, European STOXX index up 1.90%, the UK FTSE up 0.82%, CAC closing up 1.89% and the DAX up 2.06%. The Syrian conflict sensitive Istanbul exchange closed up 3.01%.
Equity index futures
The DJIA equity index future is currently up 0.05%, the SPX up 0.01% and the NASDAQ up 0.04%. The FTSE equity index future is up 0.99% and the CAC is up 1.93%, whilst the DAX equity index future is up 2.15%. On the strength of these numbers investors and traders appear to be pencilling in a positive day in the equities markets on Wednesday.
Forex focus
The yen dropped 0.9 percent to 133.18 per euro after sliding to the weakest level witnessed since May 22nd. Yen fell 0.8 percent to 100.39 per dollar after depreciating to the least since July 25th. The euro was little changed at $1.3268. The dollar fell versus most of its major peers as Secretary of State John Kerry said the U.S. will explore a Russian proposal for Syria to turn over its chemical weapons. The U.S. Dollar Index, which measures the greenback versus its ten major peers, traded at 1,027.88 later in the New York session after touching 1,026.53, the lowest level seen since Aug 28th.
The yen has declined 1.7 percent in the past week, the worst performer of the 10 developed-nation currencies tracked by Bloomberg’s Correlation Weighted Indexes. The dollar has dropped one percent and the euro fell 0.5 percent.
Australia’s dollar rose 0.9 percent to 93.12 U.S. cents, the highest since July 24th. The loonie rose 0.2 percent to C$1.0349 per U.S. dollar late in the Toronto session. One loonie buys 96.63 U.S. cents. The currency earlier gained to C$1.0331, the strongest intraday level seen since Aug 19th and past its 100-day moving average at C$1.0333. The loonie recently breached its 50-day moving average of C$1.0406. The loonie has dropped one percent in the past three months versus nine developed nation currencies tracked by Bloomberg’s Correlation-Weighted Index. The New Zealand dollar is the largest gainer during that period with a 3.5 percent rise, whilst the Norwegian krone posted the biggest drop, at circa two percent.
Fundamental policy decisions and high impact news events that could affect market sentiment on September 11th
Wednesday is quite an active day for Australasian high impact news events later in the day. But first we have the unemployment rate and claimant count in the UK where the unemployment rate is predicted to remain at 7.8%.
New Zealand’s central bank will publish its minutes and announce the base rate expected to remain at 2.5%. Australia’s unemployment rate is published and the claimant count change, with the unemployment rate predicted to remain static at 5.7-5.8%
