Welcome to my daily Markets Musings.
You’ll see things are different from now on. That’s because the full note was approaching 2,000 words some days and I’m breaking it up into a number of reports on the Axi Blog each day now.
That way traders can subscribe to the Axi Blog easily and then cherry pick the yarns and markets of interest
Feedback always welcome
Market Summary (7.44am Thursday, September 6)
It’s a sea of red across global stock markets again this morning. After China and Asia in general came under heavy selling pressure yesterday Europe joined the fray overnight with more substantial losses. But we should all be thankful for the relative stability of US stocks which, although down again overnight, are the only thing between where we are now and a full blown global markets rout.
Certainly that continued pressure on stocks and EM stocks markets was released a little in EM forex where the Argentine peso and Turkish lira both gained around 1.25% against the USD, while the BRL and MXN were both around 0.3-0.4% better against the Greenback overnight. But Asia’s currencies were under pressure again yesterday and any hiatus in the forex universe is just a little calm in an enduring storm.
Back to stocks then and the S&P 500 is down 0.27% at 2,888.62. That’s a fall of 8 points but 12 points off the lows. So maybe Europe may play a little catch up when it opens this afternoon – maybe. The Dow was the exception to the sea of red with a 0.1% increase to 25,974.The Nasdaq though is under pressure as the tech giants do a poor job in front of congress, as the President attacks them over election meddling, and as US attorney-general Jeff Sessions seeks to work with state counterparts to target the firms. The Nasdaq 100 is off 1.3% at 7,523 and closing in on important levels as you’ll see in the full report.
In Germany the DAX was 1.4% lower, the CAC in France fell 1.54%, and the FTSE in London was 1% lower. This was despite decent services PMI data and news that the UK and EU might be kicking the hard Brexit can down the road till after the UK leaves reports (later denied) said last night. Go figure.
Here at home after losing more than 60 points yesterday and closing on important technical support at 6,230 in ASX 200 terms SPI traders have found another 23 points of losses overnight. At 6,192 the SPI is now below both supports I highlighted yesterday and in danger of a much bigger fall.
Looking at forex now the Brexit news, along with Italian deputy PM Salvini’s promise to play nice on the deficit, and the Italian government’s announcement of a debt buyback all combined to give the Pound and Euro a lift and knock the USD off its perch. GBPUSD and EURUSD are both up o.45% at 1.2909 and 1.1631 respectively. USDJPY sits around 111.53 for a gain of 0.1%.
On the commodity bloc the USD weakness and a little rally in copper seems to have helped the Aussie which sits at 0.7193, up 0.22%. The Kiwi did better though with a 0.6% gain to 0.6592 while the CAD lagged with a gain of just 0.1% with USDCAD at 1.3172 as the BoC left rates on hold, NAFTA is still unresolved, and oil prices fell.
Speaking of which, a technical break, OPEC secretary general saying he’s worried about the impact of demand of the trade war, and the storm not hitting the Gulf of Mexico as hard as anticipated saw oil prices lower. Brent is off 1.06% at $77.34 while WTI dipped 1.4% to $68.89. Gold rose with the pound and Euro for a 0.43% gain to $1196, while copper is up 0.7% in HGc1 terms to $2.60.
Bitcoin, and cryptos more broadly, fell out of bed as Goldies said they are delaying the opening of their desk and Slip Stream is getting rid anonymity.
US 10’s are at 2.90%, the 2’s are at 2.65%, the curve is a rounded 24.5 points and th Atlanta Fed dropped the Q3 GDP guesstimate to 4.4% after the trade blowout overnight.
On the day today we get Australian trade data for July, South Korean current account, and German factory orders before the release of the Challenger and ADP precursors to tomorrow night’s non-farms. We also non-farm productivity, the Markit and ISM services PMI’s and factory orders. Not to mention the EIA crude data.
Speaking of which the API data is just out showing a crude draw of 1.2 million barrels which a bit less than expected. Oh and a White House insider has had an anti-Trump op-ed published in the NY Times anonymously this morning.
Have a good day, it’s probably going to be better than the President’s and his staff.
Macro Stuff that affects everyone and everything - either today or eventually
Have a great day's trading.
Chief Market Strategist
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US equities continue to welcome any high-risk event being put in the rear-view mirror – especially when rates markets look prime to consolidate lower