Market News

• USD (USDIndex 92.60) rallies on back of rising yields and equity wobbles.
• Yields rallied ; as Treasuries slipped, (10yr 1.37%)
• Equities stalled – USA500 -15 at 4520 (Dow lost -0.76%) Nasdaq flat. USAFUTS at  4521), post Labor Day profit taking, cyclicals slipped tech held on. (MS talks of 10-15% pull back)¹
• USOil recovered from $67.50, back to $68.50 now, but well below $70.00 pre NFP high.
• Gold tanked to $1792, from 1828 yesterday and 1833 on Friday. Trades at $1795 now.
• Overnight – JPY GDP beat (0.5% vs 0.2%) but Econ Sentiment slipped.

European Open – Yesterday EZ GDP revised higher, but sentiment was weakr. Today the December 10-year Bund future is down -8 ticks, slightly underperforming versus Treasury futures. The paper is off the highs seen during the Asian part of the session however, and investors will look for Fedspeak today for further guidance on the US interest rate outlook. Markets seem resigned to an announcement of a slight tapering of PEPP purchases from the ECB this week and that will likely see Bunds underperforming versus Gilts and Treasuries. DAX and FTSE 100 futures are down -0.025% and -0.336% respectively, after a largely weaker session in Asia. FX markets EURUSD is down to 1.1835, from 1.1890 yesterday, while the pound struggled and cable dipped to 1.3755, after the government announced tax hikes that will hit workers and businesses. USDJPY rallied from 109.68 yesterday to breach & hold 110.00, at 110.40. 

Today – US Crude Private Inventories, BoC Policy Decision, BoE’s Bailey, Ramsden, Broadbent, Tenreyro, Fed’s Williams.

Biggest Mover @ (06:30 GMT) AUDUSD (-0.13%)  All AUD pairs remain pressured following RBA yeasterday. Breached, 0.7400 to 0.7370 now. Faster MA’s aligned lower, MACD signal line & histogram below 0 line but flat. RSI 28.80, OS but still falling. Stochs OS n still falling.  H1 ATR 0.00082, Daily ATR 0.00615.

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Stuart Cowell

Head Market Analyst

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