Scoreboard: Home comfort

Global equities did little overnight, but then again they did hold onto those solid gains made in the previous session. That may not sound like much of an achievement, but when you consider that most data indicators turned down, it’s pretty good. I say most indicators as not all turned down – in particular US house prices continue to surge, rising 0.8 per cent in December to be 13.4 per cent higher over the year. That’s the largest annual gain since 2005 and there is of course no reason to expect that momentum slow.

Wall Street’s major indices were just in the red with about an hour left to trade. The S&P500 is down 0.1 per cent (1846), the Dow is flat and the Nasdaq is down 0.1 per cent (4289). Over in Europe, equities had a similar session: the Dax and the CaC fell 0.1 per cent while the FTSE100 was 0.5 per cent lower.

Forex had little action for the euro which still hovers around 1.3742, while the Australian dollar is little changed as well at 0.9016. The British pound is at 1.6680 and the yen at 102.15.

Commodities sold off – except gold that is, which rose nearly $6 to $1343. Otherwise silver fell 0.4 per cent and copper fell 0.6 per cent. On the crude front, WTI fell 0.7 per cent to $102.06 and Brent fell more than 1 per cent to $109.53.

Rates generally saw modest buying action. On the US Treasury front the 10-year yield was down about 3 bps to 2.704 per cent, the five-year yield is at 1.508 per cent and the two-year at 0.31 per cent. Aussie futures were up four ticks on the tens (95.930) and two ticks on the threes (at 97.02).

Elsewhere, as mentioned, most US economic indicators deteriorated overnight. The Richmond Fed manufacturing index fell to minus six in February from 12 in January, while US consumer confidence dipped to 78.1 in February from 79.4. Over in Europe, the breakdown of German GDP (up 1.3 per cent year-on-year) showed growth was driven by investment (construction) and exports. While we’re on European growth, the European Commission upgraded its growth forecasts for the region. Growth in the eurozone is expected to be 1.2 per cent in 2014 up from 1.1 per cent. Over in Japan, The Bank of Japan vowed that it won’t stop printing money until the inflation target of 2 per cent is reached.

In markets today, the SPI suggests our stocks will be flat. Data wise, domestic construction work down is out at 1130 AEDT, but that’s it for the Aussie data. The consensus is that work done rose 0.2 per cent in the December quarter, after a 2.7 per cent rise in the previous quarter. Tonight we see the breakdown of UK GDP, while in the US, housing starts are released. Other than that we see a speech from the Boston Fed President Eric Rosengren on the US economy.

Have a great day…

Adam Carr is a leading market economist.

Follow @AdamCarrEcon on Twitter.