Scoreboard: Market breather

US and European markets had a quiet session, while gold saw a healthy rise and the euro fell further.

Markets took a breather last night, merely a pause from the new record highs that are being set on a daily basis -- something that will continue well into the future. It’s not surprising either as data and news flow was light, though not devoid of information.

The main release was the wholesale data out of the US. It was strong with wholesale sales rising 1.3 per cent in April, after a 1.6 per cent gain the month prior. Inventories rose strongly too, a 1.1 per cent gain following a 1.1 per cent lift in April. Outside of that, US job opening surged to the highest level in seven years.

Equities on both sides of the Atlantic traded around zero for most of the session and didn’t finish off too far from there. The S&P 500 was down 0.02 per cent (1950), the Dow was up almost 3 points (16945), while the Nasdaq was 0.04 per cent higher (4337). By sector there wasn’t much in it -- health outperformed, but again we’re not talking moves too far from zero. In fact, most of the major sectors hovered around zero. Over in Europe, the Dax was up 0.2 per cent, the CaC rose 0.1 per cent and the FTSE 100 outperformed with a 0.4 per cent rise.

Forex markets pushed the euro down again for the session, the unit losing just over 50 pips in an hour of trading (around 6pm AEST yesterday). There it stayed for the rest of the session, and as I write the euro is at $US1.3546. Sterling’s decline was more gradual, but the magnitude was similar -- down 55 pips to $US1.6756. As for the Australian dollar, the unit traded on a 30 pips range and was only up smalls in the end to $US0.9374. While the US dollar is trading at ¥102.3.

Rates had a comparatively decent move overnight. The US 10-year yield pushed higher in what was largely one-way traffic and at the session’s close was up 5bp to 2.64 per cent. The 5-year yield wasn’t too far behind that with a 4bp rise to 1.709 per cent, while the 2-year was over a bp higher to 0.439 per cent. At issue, a 3-year Treasury note auction saw slack demand, going out at the highest yield since 2011. Australian futures were off 2.5 ticks on the 3s (97.135) and 5 ticks on the 10s (96.165).

Commodities generally pushed higher with the biggest moves in the precious metals space. Gold rose nearly $8 to $1261, while silver was 0.7 per cent higher. Copper pushed higher again with a 0.5 per cent rise. Crude was mixed with WTI up 0.1 per cent ($104.5), while Brent fell 0.2 per cent.

Elsewhere, the NFIB suggests US small businesses are more optimistic in May, that index rising to 96.6 from 95.2. Then over in the UK, industrial production rose by 0.4 per cent in April to be 3 per cent higher over the year.

Markets today. The SPI suggests Aussie stocks will post a modest gain today -- up 0.3 per cent. Otherwise the key data for Australia will consumer confidence at 10.30am (AEST). Confidence slumped almost 7 per cent last month as a result of the budget. Well, more to the point the doom and gloom in the sales pitch. That’s largely it for the region. Tonight, we see UK employment numbers and the US monthly budget figures, while the RBNZ decision is at 7am (AEST) tomorrow morning.

Have a great day.

Related Articles