Scoreboard: European catch-up

The Fed’s dovish comments filtered through to European markets overnight, while the gold price saw its best daily gain in nine months.

The Fed meeting continued to drive markets overnight. European markets played catch up as Wall Street largely trod water -- at least gains from the previous session were held.

Then we saw some sizeable moves in the precious metals arena -- again seemingly Fed-driven (free money and all that).

In terms of the data, there was a bit and it wasn’t bad. Initial jobless claims fell to 312,000 in the week to June 14 from 318,000 and the Philly Fed index rose to 17.8 from 15.4, which is a nine month high. All good stuff that shows momentum in the US economy is accelerating.

Commodities were where we saw the biggest moves, surging higher in some cases on a strong bid. Gold rose $46 ($1319 per ounce), which is the biggest daily gain in about nine months. Silver had a strong bid as well, up 5.2 per cent, while copper was 0.5 per cent higher. In the crude space, WTI was 0.6 per cent higher ($106.6), while Brent was 0.7 per cent higher ($115).

Equities in Europe saw a decent bid catching up on the previous US session. The Dax rose 0.7 per cent as did the CaC. The FTSE 100 was up 0.4 per cent. On Wall Street moves were much more subdued as mentioned, but the post-Fed gains of the prior session were largely held -- and we are talking new record highs. The S&P 500 rose 0.1 per cent (1959), the Dow was up 15pts (16921) and the Nasdaq was down 0.1 per cent (4359).

Forex markets saw the euro push higher, but gains were modest (less than 20 pips to $US1.3608). The British pound was up about 40 pips to $US1.7044. Otherwise, the Australian dollar was unchanged at $US0.9404 on a narrow range and the Japanese yen is at 101.9.

Rates had an OK session with yields pushing a little higher. The US 10-year for instance was up just over 4bp to 2.627 per cent, while the 5-year was up just over 2bp (1.684 per cent). The 2-year sits at 0.452 per cent. Australian futures were off 2 ticks on the 3s (97.21) and 3.5 on the 10s (96.290)

Elsewhere, UK retail sales fell 0.5 per cent in May, following a 1.7 per cent gain the month prior. For the year, sales are up about 4 per cent. Finally, over in the USA, the St Louis Fed reports that financial stress indicators hit a record low in the week to June 13.

Markets today. The SPI suggests our market will be flat today. Data-wise there isn’t much to speak of though for our session. Tonight the eurozone current account, UK public sector borrowing and that’s largely it -- very quiet.

Have a great day. 

Related Articles