Morning Roll Call

Sep 5 • Morning Roll Call • 2938 Views • Comments Off on Morning Roll Call

Positive USA Data Cheers Markets Despite Potential Syrian Conflict Escalationg20

Despite opening in negative territory and remaining there for much of the morning session on Wednesday, European markets finished mainly in the green after positive data from the USA floated many of the boats at sea and PMI service sector results proved bullish, with the UK’s reaching a recent high of 60.5.

The DJIA and other USA indices were buoyed by published data including; total vehicle sales reaching a six year high and a consumer sentiment index, the IBD/TIPP Consumer Confidence. It’s a survey of about 900 consumers which asks respondents to rate the relative level of economic conditions including six-month economic outlook, personal financial outlook, and confidence in federal economic policies. It printed at 46, in line with analysts expectations.

There was some USA negative sentiment data published on Wednesday; the balance of payments in the USA increased from -$34.5 bn in the previous month to -$39.1 for August, an approximate 13% fall in exports versus imports. However, the bullish daily trend remained unbroken by this negative print.


Market Overview

The DJIA closed up 0.65% at 14930, the key psyche level of 15,000 is now back in play.  The SPX 500 closed up 0.81%, the NASDAQ up 1.01%.

European markets recovered from their early morning losses after positive PMI services and manufacturing data lifted the mood. The FTSE closed up 0.20%, the CAC up 0.16%, the DAX up 0.19%. The MIB fell by 1.35% and the Irish exchange fell by the most; closing down 1.59% on the day.

Looking towards the market open on Thursday the DJIA equity index future is currently up 0.07%, as is the SPX. The NASDAQ is up 0.10%. European equity indies futures are mainly in the green, FTSE up 0.26%, STOXX up 0.18%, DAX up 0.21% and CAC up 0.19% suggesting that European indices will open in positive territory.

ICE WTI oil fell by 1.21% to $107.23 per barrel, NYMEX natural finished up 0.19% on the day at $3.68 per therm. COMEX gold up 0.12% at $1391.60, silver on COMEX at $23.50 down 0.37% on the day.


Forex focus

Sterling climbed 0.3 percent to 84.45 pence per euro late in the London session after reaching 84.27 pence, the strongest level since May 16th. Sterling rose 0.5 percent to $1.5640. The pound strengthened to the highest in over three months versus the euro after the PMI services report revealed U.K. services expanded at the fastest pace since 2006, boosting demand for Britain’s currency.

The loonie, rose 0.3 percent to C$1.0493 per U.S. dollar late in the Toronto session. It gained 0.6 percent earlier, the biggest intraday move since Aug 8th. One loonie buys 95.30 U.S. cents. The Canadian dollar strengthened for a second day as optimism  over faster global economic growth fueled demand for riskier assets and Canada’s central bank kept its main interest rate unchanged.

The Aussie rose 0.7 percent to 91.28 U.S. cents late in the Sydney session, after climbing 1 percent the previous day. It climbed to 91.28, the most since Aug 20th. The currency gained 0.8 percent to 90.98 yen and earlier reached 91.05, the most since July 29th. New Zealand’s kiwi dollar added 0.8 percent to 78.58 U.S. cents and rose 0.9 percent to 78.34 yen. Australia’s dollar rose to a two-week high after data showed second-quarter gross domestic product grew at a faster pace than economists had predicted.


High impact news events and policy decisions that may affect sentiment on September 5th

As European markets open the details of Japan’s base rate decision and the accompanying BOJ statement will have been published. Later in the morning the UK base rate is expected to stay at 0.5% for its record length of time, similarly the QE/asset purchase scheme at £375 bn is expected to stay fixed under the BoE forward guidance.

The ECB is also expected to keep its rate at 0.5%, the press conference could provide clues as to what measures, if any, the ECB will consider using should the potential fragile Eurozone recovery begin to lose steam.

The USA continual unemployment insurance claims are published, as is the ADP employment number. ADP are predicting the creation of 175K new jobs in the USA, whilst continual claims are predicted to print at 331K, still magnetically sticking to that stubborn range of 330-350K.

The ISM non manufacturing is published, a fall from 56 to 55.2 is pencilled in as a projection. Factory orders in the USA are predicted to fall by -3.4%, quite a reversal from the previously month’s print of +1.5%.

The G20 meeting begins tomorrow, naturally the key issue for discussion will be Syria, therefore the markets could experience spikes depending on the mood music emanating from the forum.

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