Scoreboard: House-proud USA

A rise in US home sales helped give Wall Street a modest push, while Chinese manufacturing figures also boosted market sentiment.

Stocks managed to push higher overnight, although gains were modest and there wasn’t a lot to really drive a bid. Early buying was perhaps sparked, at the margin, by a lift in a Chinese manufacturing survey -- a lift certainly doesn’t hurt but that indicator is minor.

Moreover, most of the other data out was neutral at best. Jobless claims, for instance, rose from 298,000 to 326,000 in the week to May 17. It’s a rise -- a rise in new claims is bad -- but then again claims are low, and this is good.

Then existing home sales in the US rose 1.3 per cent in April, but this follows a dip the month prior (-0.2 per cent). You get the gist -- nothing concrete. In the background Thailand had yet another military coup, and fighting flared up in Eastern Ukraine.

Equities saw a modest bid on Wall Street. At the bell, the S&P500 was up 0.2 per cent to 1,892. The Dow then rose 10 points to 16,543, while the Nasdaq outperformed, up 0.6 per cent, to 4,154. By sector, utilities, health and consumer services outperformed, with energy and consumer goods underperforming. Over in Europe, the Dax was 0.2 per cent higher, the CaC rose 0.2 per cent, but the FTSE100 fell 0.3 per cent.

Forex markets pushed the euro down, about 20 pips to 1.3655, while the British pound, having hit a high of 1.6869, fell about 15 pips to 1.6869. The Australian dollar, after a spike of about 50 pips following that Chinese manufacturing PMI, gave all that back to end at 0.9224 -- where it was just before the Chinese data came out.

Rates did little. The US 10-year Treasury yield slipped less than a bp to 2.553 per cent, while the five-year was up a fraction to 1.544 per cent. The two-year Treasury yield is at 0.347 per cent. Naturally, Aussie futures followed suit with 3s at 97.2 and 10s at 96.255.

Commodities saw mixed price action, with crude off a bit on both Brent (-0.1 per cent to $110.3) and WTI (-0.3 per cent to $103.7). In the metals space, we saw a decent bid -- base metals on the back of that Chinese manufacturing data -- with copper up 0.5 per cent, silver rose 0.8 per cent, while gold was 0.4 per cent higher to $1,293.

Elsewhere, UK GDP was confirmed around 0.8 per cent with annual growth at 3.1 per cent. Private consumption and business investment were the key drivers of growth, rising 0.8 per cent and 2.7 per cent respectively in the quarter. Then we saw the European PMI for May, which showed a modest fall, the composite indicator down to 53.9 from 54, while the manufacturing PMI fell to 52.5 from 53.4. Over in the US there were some minor indicators showing mixed results. Markit’s manufacturing PMI showed a lift to 56.2 in May, from 55.4. That said the Chicago Fed national activity index fell to -0.3 in April from 0.3 and the leading indicators slipped to 0.4 per cent in April, from 1 per cent.

Markets today. Aussie stocks look set to receive a modest bid today with the SPI up by 0.3 per cent overnight. In terms of dataflow, there isn’t much out for our session, but tonight it’s worth looking out for the German IFO survey, the breakdown of German GDP and new home sales for the US.

Have a great day.

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