Scoreboard: European burden

Weak European PMI figures clouded positive US data and weighed on markets, while the Australian dollar slipped but remains above US94c.

A nondescript night all up, with stock price changes little different from zero in the US, bonds unchanged, and a mixed session for commodities.

US data was positive, with existing home sales up 4.9 per cent in May, which was well above the 1.9 per cent expectation and follows a 1.5 per cent gain the month prior.

That said, data out of Europe wasn’t as good, with the PMI weakening, and while those indicators aren’t as strong as hard data like home sales, a result like that certainly won’t act to lift sentiment. Maybe that’s why the US data didn’t seem to really create a bid (there was a slight wobble but that was it) for stocks or commodities afterwards, instead breaking (just) the positive momentum over the last six sessions.

Equities were generally weaker on both side of the Atlantic, though Europe underperformed. At the close the Dax was down 0.7 per cent, the CaC fell 0.6 per cent, and the FTSE 100 was off 0.4 per cent. Over on Wall Street stocks pushed slightly higher early on and were down 0.2 per cent at the low, retracing that to finish the session largely flat (0.01 per cent weaker to 1,962 points). The Dow was off 0.06 per cent (16937) at the bell, while the Nasdaq rose 0.01 per cent (4368). By sector, energy and telecommunications look to have outperformed, otherwise industrials, consumer goods and healthcare were the key underperformers.

Commodities were mixed in the end, gold up smalls ($1318), silver down 0.3 per cent and copper up 0.8 per cent. In the crude space, WTI was 0.8 per cent higher at $107.3, while Brent fell 0.6 per cent to $114.

Forex markets saw the euro weaken a bit to $US1.3602 on a 40-pip range. The British pound ended 20 pips lower at $US1.7028, although that’s still around six-year highs. As for the Australian dollar, the unit is about 20 pips lower at $US0.9418 and the US dollar is buying 101.9 Japanese yen.

Rates did little in the end, the US 10-year treasury yield still around 2.62 per cent at the session close (low of 2.58 per cent). The 5-year yield was down to 1.67 per cent at the low, but also ended unchanged at 1.7005 per cent. The 2-year is at 0.46 per cent. Aussie futures then edged higher, up 1 tick on the 3s (97.210) and 1.5 ticks on the 10s (96.310).

Elsewhere, the eurozone manufacturing PMI dipped a bit in June, the index falling to 51.9 from 52.2. The composite PMI fell to 52.8 from 53.5. Over in the US, the manufacturing PMI rose about 1 point to 57.5. We also saw the Chicago Fed national activity index and this rose to 0.21 in May from -0.15.

Markets today. The SPI suggests our market will effectively be flat today. Data-wise there isn’t a great deal for Australia. We only see the weekly consumer confidence index from ANZ Roy Morgan. Then looking abroad, the conference board put out a leading index for China around 12. Apart from that we see the German IFO index US house prices, new home sales and the Richmond Fed manufacturing index. Finally, there are a few speakers from the Bank of England including the Canadian governor, Mark Carney. The Philly Fed president Charles Plosser also speaks on the US economy.

Have a great day.

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