Scoreboard: Good news week

Markets were mostly positive without bad news standing in the way, while German factory orders steamed ahead.

The run of solid economic data continues. For last night’s session we saw German factory orders surge 3.3 per cent in September, to be nearly 8 per cent higher annually, while over in the United Kingdom, industrial production rose 0.9 per cent. Admittedly this follows a fall in the month prior of about 1 per cent, but this is an economy only recently come to health. Annual growth in production is positive at 2 per cent, and then of course house prices are posting solid gains - Halifax reporting growth of about 7 per cent (annual) in the three months to October.

These are all very positive signals of course, although UK stocks were weaker with the FTSE100 down 0.1 per cent. The Dax and CAC had a better session though, rising 0.4 per cent and 0.8 per cent respectively.

Across the Atlantic there wasn’t much in the way of data, only minor stuff although the tone was positive on balance. So we saw Challenger’s jobs report, showing that compared to the same time last year the number of planned job cuts was about 4 per cent lower. Similarly, the leading indicators point to an acceleration in growth - that index jumped 0.7 per cent. I’m not suggesting that these are must-watch market sensitive data releases, I’m only highlighting them to show that there was nothing really standing in the way of further gains for Wall Street last night - no bad news.

And so it was that - and with an hour left to trade - the S&P500 was 0.4 per cent higher (1769), while the Dow was up 117 points (15735) although the Nasdaq fell 0.3 per cent (3928). By sector, telecommunications and utilities were the key outperformers, with healthcare and consumer service stocks the key deadweights.

Otherwise we saw a mixed session for commodities, with crude up 1.6 per cent ($94.87) on WTI, following a report from the Energy Information Administration showing demand for gasoline rose to its strongest since early July, although having said that crude oil stockpiles rose again. The fact is that commodities have been doing their own thing. Elsewhere, gold was up about $8 ($1316), while copper was down 0.6 per cent.

There wasn’t really much excitement outside of that - the US dollar weakened a bit as did bond yields - the US 10-year down 3 bps to 2.64 per cent. The dollar index itself was down smalls which saw the Australian dollar up another 15 pips or so from 1630 yesterday to be at 0.9536. The euro was up about the same to 1.3505, while the yen is at 98.65 (unchanged).

For our market today, the SPI points to a very modest increase of about 5 points. Otherwise the key data will be the domestic employment figures at 1130 AEDT. The consensus is that the economy created 10,000 jobs in October, following a gain around that in the month prior. The unemployment rate is expected to rise to 5.7 per cent from 5.6 per cent. 

There isn’t much else of note for our region, but tonight there is plenty. Both the European Central Bank and Bank of England meet with no changes in policy expected, although there is talk the ECB might cut rates again at some point following recent low inflation figures.  Other than that, we see German industrial production figures and the advance estimate of third quarter US GDP – 2 per cent expected from 2.5 per cent in the second quarter. US jobless claims are worth a watch too.

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