Markets had comparatively quiet night last night. Nothing major really going on and in the equity space, most of the major indices we little different from zero. Economic data itself was reasonably good. In particular US jobless claims fell again, about 10,000 to 311,000 which of course points to ongoing strong jobs growth in the US.
Then on the GDP front, growth was revised up to 2.6 per cent in the final estimate from 2.4 per cent. Consumer spending drove that revision, coming in at 3.3 per cent, compared to 2.6 per cent previously and 2 per cent in the third quarter. The key detraction to growth came from government spending, which knocked nearly a full percentage point from growth. I suspect investors are still watching the events in Ukraine.
Global equities saw mostly small moves around zero overnight. In Europe, the Dax was 0.03 per cent higher, the CaC was down 0.1 per cent and the FTSE100 fell 0.26 per cent. As I write, Wall Street isn’t too different with the S&P500 down 0.2 per cent (1848), the Dow up 4 points (16,269) and the Nasdaq off 0.5 per cent (4154). By Sector, telecommunications and energy outperformed, with consumer services, tech and financials underperforming.
In commodity markets, precious metals continue to weaken -- gold off just under $10 to $2193, while silver fell 0.3 per cent. Copper however rose about 1 per cent. In the crude space, WTI was up 1.1 per cent to $101.3, on more data showing a decline in supplies, while Brent was up 0.7 per cent to $107.6.
Forex markets saw the Australian dollar push a bit higher again -- another 20 pips or so to 0.9261. Same with the British pound -- about the same magnitude to 1.6607. The euro in turn was down about 45 pips to 1.3742 and the yen sits just above target at 102.17.
Rates fell again overnight as US bonds rallied. The US 10-year treasury yield is down 2 bps to 2.68 per cent with the 5-year yield unchanged at 1.70 per cent and the 2-year at 0.44 per cent. Aussie futures were then up 1-2 ticks on the threes and tens -- 96.96 and 95.93 respectively.
Elsewhere, US data were mixed. Pending home sales fell 0.8 per cent in February and are 10 per cent lower annually. On a more positive note, the Kansas City Fed manufacturing index rose to 10 from four. In Britain, retail sales surged, rising 1.8 per cent in February, although that follows a 2 per cent fall the month prior. Annually, sales are 4.2 per cent higher.
In markets today, the SPI suggests our stocks will fall 0.2 per cent. Otherwise we see TD’s Aussie inflation gauge, and Japanese consumer prices and retail spending. That’s it for our region though. Tonight, the key US data includes personal income and spending, Michigan University’s consumer confidence index, and we see a number of Fed speakers (Charles Evans and Esther George). Other than that, we see Britain’s fourth-quarter GDP breakdown, eurozone economic confidence and German inflation data.
Have a great day…
Adam Carr is a leading market economist.
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