Not a great deal happened on Friday night, largely because there was no major news or data flow for that session. The key data release was the University of Michigan’s consumer confidence index. This showed confidence rose to 82.5 in June (final estimate) from 81.2. Not bad, but it doesn’t compare with the big gun figures we see this week -- payrolls and the ISM index. Naturally, investors are going to wait for those figures.
Equities pushed modestly higher on Friday night. On Wall Street, the S&P 500 down 0.2 per cent (1960), the Dow rose almost 6 points (16851), while the Nasdaq was up 0.4 per cent (4397). By sector, tech stocks, industrial telecommunications and utilities outperformed. Over in Europe, we saw the Dax up 0.1 per cent while the CaC was down 0.1 per cent. The FTSE 100 was up 0.3 per cent.
Commodities were generally mixed -- gold was up a few bucks to $1320. Elsewhere though silver was down nearly 1 per cent, copper fell 0.5 per cent and crude prices were mixed -- WTI was off 0.1 per cent ($105.7), and Brent was up 0.1 per cent ($113.3).
Forex markets saw the euro move about 17 pips higher to $US1.3645, the British pound in contrast was steady at $US1.7033 on a 40pip range. As for the Australian dollar, it was little changed at $US0.9423, down smalls. The Japanese yen sits at 101.4.
Rates were mixed in the US. The US 10-year yield rose just under 2bp to 2.535 per cent on a 3bp range. The 5-year yield followed suit, falling around 3bp to 1.647 per cent, while the 2-year is at 0.464 per cent. Aussie futures were down a couple of ticks -- 3s at 97.30 and 10s at 96.430.
Elsewhere, the eurozone business climate indicator slipped to 0.2 in June, from 0.37 the month prior. Consumer confidence, economic confidence and industrial confidence all deteriorated. German inflation rose by 0.4 per cent in June, to be 1 per cent higher annually.
Markets this week. The SPI suggests that stocks will post small gains today (8 points). Data-wise the key releases for Australia today include HIA’s new home sales series and the RBA’s private sector credit measure (at 11am and 11.30am AEST respectively).
On Tuesday we see RP Data-Rismark’s house price series at 10am (AEST) and the RBA decision at 2.00pm (AEST). No one is looking for any change to the target rate (currently 2.5 per cent) and as usual the focus of attention will be on the statement. I wouldn’t look for any dramatic changes -- any changes will be dovish -- and think the Bank will remain neutral overall. On Wednesday we see the Trade Balance (11.30 AEST), while on Thursday retail sales and building approvals are released (11.30 AEST).
Looking abroad, the key data will be payrolls on Thursday night (US markets are closed Friday for Independence Day). The market looks for a 210,000 gain following on from a 217,000 gain the month prior, while the unemployment rate is forecast to remain steady at 6.3 per cent. Data out prior to that includes the ISM manufacturing survey on Tuesday night. That’s the important stuff, although there are a number of other surveys throughout the week worth watching -- pending home sales, ADP employment report etc.
Outside of the US, Chinese data includes the manufacturing PMI’s on Tuesday from 11am (AEST) and then non-manufacturing PMI’s on Thursday, also from 11am (AEST). As for European data, we see German retail sales and European inflation today, employment figures on Tuesday and German factory orders on Friday.
Have a great day.