Scoreboard: Ukraine unrest

Tensions in Ukraine kept markets subdued, while mixed data out of the US and China failed to inspire.

Global equities pushed modestly overnight, although fair to say that moves were small and volumes weak -- third lowest this year.

Weighing on stocks are events in the Ukraine, with the fighting appearing to intensify following the failure of everyone involved to compromise.

Also getting a lot of press was a non-official Chinese manufacturing survey out yesterday which showed a modest fall -- although this is a lower tier release and moves on the index were very small so I doubt this actually had much to do with anything, despite the press.

Of more importance was the ISM’s non-manufacturing survey for the US. This showed the services sector accelerating in April, with the index rising to 55.2 from 53.1. A good result given services account for something like 70-80 per cent of the US economy. While this is a well-respected survey, it’s probably not big enough to really give the market a solid push higher.

Equities on Wall Street initially fell with the S&P500 down a decent 0.7 per cent at the low. Markets then saw a solid bid after that non-manufacturing data, with the S&P500 pushing up nearly 20 points from the low, to close back in the black -- if only just.  At the bell, the S&P500 was up 0.2 per cent (1884), the Dow was 17 points higher (16530), while the Nasdaq was 0.3 per cent higher (4138). Over in Europe, the Dax fell 0.3 per cent, the CaC was 0.1 per cent higher, while UK markets were closed. 

Commodities saw some decent moves on crude. Brent fell another 1 per cent despite tension in the Ukraine (wheat in contrast rose almost 2 per cent to a 13 month high). WTI was then of 0.4 per cent ($99.36) while in the metals space, gold rose $7.2 to $1310, silver was 0.1 per cent higher, while copper fell 0.3 per cent.

Forex moves were small overnight. The euro traded within a narrow range and ended little changed at 1.3875. Ditto for Sterling, which traded on a 20pips range and sits at 1.6869, while Yen is at 102.1. The Australian dollar traded just shy of 30pips and is unchanged as I write at 0.9274.

Rates ended a little higher, with the yield on the 10 year US Treasury at 2.60 per cent, up about 3bp from 1630 yesterday. The 5 year yield ended at 1.67 per cent or 2bp higher, while the 2 year is at 0.41 per cent (little changed).

Elsewhere, European producer prices fell by 0.2 per cent in March to be 1.6 per cent lower annually. Still in Europe, investor confidence dipped a bit in May the Sentix investor index down to 12.8 from 14.1. Finally, the final estimate of Markit’s US composite PMI rose to 55.6 from 54.9.

Markets today. The SPI suggests our stocks will post a modest rise today, maybe 0.2 per cent. Outside of that, the key concern for our market today is the Reserve Bank decision at 2.30pm (AEST). No one looks for rates to change today, and so the focus will be on their statement and in particular, whether there are any changes in wording. The trade balance comes out before the decision at 11.30 am (AEST), it’s not a market moving release though. Tonight it’s comparatively quiet. We see the final estimates of the eurozone PMIs and we also see eurozone retail sales. For the US, data includes the trade balance and we also see a speech from a Federal Reserve Governor, Jeremy Stein.

Have a great day.

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