30 Sep 2013 AMC
Market Summary
European
Markets Closing Prices
European markets are now closed; stock markets across Europe performed as follows:
·
UK's FTSE: -0.8%
·
Germany's DAX: -0.8%
·
France's CAC: -1.0%
·
Spain's IBEX: -0.5%
·
Portugal's PSI: -0.8%
·
Italy's MIB Index: -1.2%
·
Irish Ovrl Index: -0.1%
·
Greece ATHEX Composite: -1.6%
Before Market Opens
S&P futures vs fair value: -13.70. Nasdaq
futures vs fair value: -27.80.
The major averages will begin today's session with notable losses as investors grapple with political turmoil around the world. In Europe, markets have been pressured by the resignation of five PDL ministers from the coalition government. Greece was not left out of the news flow with the leader of the Golden Dawn party Nikolaos Michaloliakos being placed under arrest and charged with belonging to a criminal organization.
Meanwhile, the political situation in the U.S. is little changed from Friday. After the Senate passed a stopgap funding bill without a provision to defund Obamacare, the House countered by adding a one-year Obamacare delay to the funding bill before sending it back to the Senate. With a midnight shutdown looming, investors should be on the lookout for headlines from Washington throughout the day.
Treasuries received a modest overnight bid, but retraced their gains in the past hour. The benchmark 10-yr yield is little changed at 2.63%.
The September Chicago PMI will be reported at 9:45 ET.
The major averages will begin today's session with notable losses as investors grapple with political turmoil around the world. In Europe, markets have been pressured by the resignation of five PDL ministers from the coalition government. Greece was not left out of the news flow with the leader of the Golden Dawn party Nikolaos Michaloliakos being placed under arrest and charged with belonging to a criminal organization.
Meanwhile, the political situation in the U.S. is little changed from Friday. After the Senate passed a stopgap funding bill without a provision to defund Obamacare, the House countered by adding a one-year Obamacare delay to the funding bill before sending it back to the Senate. With a midnight shutdown looming, investors should be on the lookout for headlines from Washington throughout the day.
Treasuries received a modest overnight bid, but retraced their gains in the past hour. The benchmark 10-yr yield is little changed at 2.63%.
The September Chicago PMI will be reported at 9:45 ET.
Market Internals
Market Internals -Technical-
The Dow closed down 129 (-0.84%) at 15130, the S&P 500 closed down 10 (-0.60%) at 1682, and the Nasdaq closed down 10 (-0.27%) at 3771. Action came on above average volume (NYSE 879 mln vs. avg. of 693; NASDAQ 1773 mln vs. avg. of 1581), with decliners outpacing advancers (NYSE 1232/1834, NASDAQ 1163/1391) and new highs outpacing new lows (NYSE 66/37, NASDAQ 109/23).
Relative Strength:
Volatility-VXX +3.51%, Sugar-SGG +2.22%, Brazilian Real-BZF +1.57%, Israel-EIS +1.42%, Indian Rupee-ICN +1.16%, Clean Energy-PBW +1.11%, Regional Banks-KRE +0.56%, Turkey-TUR +0.46%, Cotton-BAL +0.41%, British Pound-FXB +0.28%.
Relative Weakness:
Indonesia-IDX -3.25%, Grains-JJG -2.30%, Thailand-THD -2.22%, Chile-ECH -2.15%, Junior Gold Miners-GDXJ -2.14%, Corn-CORN -2.13%, Eastern Europe-ESR 2.07%, Silver Miners-SIL -1.86%, Egypt-EGPT -1.83%, Biotechnology-XBI -1.55%.
The Dow closed down 129 (-0.84%) at 15130, the S&P 500 closed down 10 (-0.60%) at 1682, and the Nasdaq closed down 10 (-0.27%) at 3771. Action came on above average volume (NYSE 879 mln vs. avg. of 693; NASDAQ 1773 mln vs. avg. of 1581), with decliners outpacing advancers (NYSE 1232/1834, NASDAQ 1163/1391) and new highs outpacing new lows (NYSE 66/37, NASDAQ 109/23).
Relative Strength:
Volatility-VXX +3.51%, Sugar-SGG +2.22%, Brazilian Real-BZF +1.57%, Israel-EIS +1.42%, Indian Rupee-ICN +1.16%, Clean Energy-PBW +1.11%, Regional Banks-KRE +0.56%, Turkey-TUR +0.46%, Cotton-BAL +0.41%, British Pound-FXB +0.28%.
Relative Weakness:
Indonesia-IDX -3.25%, Grains-JJG -2.30%, Thailand-THD -2.22%, Chile-ECH -2.15%, Junior Gold Miners-GDXJ -2.14%, Corn-CORN -2.13%, Eastern Europe-ESR 2.07%, Silver Miners-SIL -1.86%, Egypt-EGPT -1.83%, Biotechnology-XBI -1.55%.
Leaders and Laggards
Technical Updates
Briefing's Commentaries
Closing Market Summary: Equities End Q3 on
Cautious Note
The S&P 500 fell 0.6% in the final session of the third quarter, trimming its quarterly advance to 4.7%.
Stocks stumbled out of the gate as political uncertainty in Washington and Italy caused participants to reduce their risk exposure.
In Washington, the federal government is on track to shut down at midnight following a game of political ping pong between the House of Representatives and the Senate. The two legislative bodies spent the day exchanging competing bill proposals with the House seeking to make changes to Obamacare while the Senate refused to engage in debate that would jeopardize funding for the health care law.
Overseas, the Italian government is on the ropes after five PDL ministers withdrew their support for the current legislature at the request of party leader Silvio Berlusconi. With the country's future in question, Prime Minister Enrico Letta is expected to appear in front of parliament on Wednesday to seek a new majority. Despite today's developments, Italian 10-yr yield ended little changed at 4.57% after increasing 20 basis points late last week in anticipation of the turmoil.
After notching their lows during the opening minutes, the major averages spent the first-half of the session in a steady climb with the Nasdaq (-0.3%) and Russell 2000 (-0.04%) pacing the rebound. The outperformance of the two indices was a recurring theme throughout the third quarter as the Nasdaq and Russell ended with respective gains of 10.8% and 9.9%.
All ten sectors settled in the red with consumer staples (-1.1%) leading to the downside. Meanwhile, other countercyclical groups ended mixed. Health care (-0.3%) and utilities (-0.1%) outperformed while telecom services (-0.6%) finished in-line.
The S&P 500 struggled with its 50-day moving average (1680) throughout the afternoon, but managed to close just above that level despite weakness among several cyclical sectors. Notably, energy, financials, and technology lost between 0.6% and 0.8% with energy leading to the downside as crude oil fell 0.5% to $102.32 per barrel.
Elsewhere, major financials lagged throughout the day. JPMorgan Chase (JPM 51.69, -0.55) was the weakest performer among the majors while the broader sector lost 0.7%.
Lastly, the technology sector saw some of its top components like Apple (AAPL 476.75, -6.00), Oracle (ORCL 33.17, -0.61), and Visa (V 191.10, -1.95) lose between 1.0% and 1.8%. Chipmakers withstood the bulk of the selling as the PHLX Semiconductor Index ended flat.
Treasuries ended little changed with the benchmark 10-yr yield down at 2.61%.
Trading volume surpassed the 200-day moving average of 728 million as 878 million shares changed hands on the floor of the New York Stock Exchange.
Economic data was limited to the September Chicago PMI report, which increased to 55.7 from 53.0 (Briefing.com consensus 53.7), representing the strongest reading since February. The Production Index improved to 58.0 from 53.0 with the increase completely due to continued strengthening in new orders.
The new orders index increased to 58.9 from 57.2. Another month of accelerating production gains may not be in the cards. Order backlogs have contracted each of the previous four months, putting the index at 46.7. Without a steady supply of backlogs, production gains will completely rely on new orders, and maintaining new orders at their current elevated levels may be difficult.
Tomorrow, August construction spending and the September ISM Index will both be reported at 10:00 ET.
The S&P 500 fell 0.6% in the final session of the third quarter, trimming its quarterly advance to 4.7%.
Stocks stumbled out of the gate as political uncertainty in Washington and Italy caused participants to reduce their risk exposure.
In Washington, the federal government is on track to shut down at midnight following a game of political ping pong between the House of Representatives and the Senate. The two legislative bodies spent the day exchanging competing bill proposals with the House seeking to make changes to Obamacare while the Senate refused to engage in debate that would jeopardize funding for the health care law.
Overseas, the Italian government is on the ropes after five PDL ministers withdrew their support for the current legislature at the request of party leader Silvio Berlusconi. With the country's future in question, Prime Minister Enrico Letta is expected to appear in front of parliament on Wednesday to seek a new majority. Despite today's developments, Italian 10-yr yield ended little changed at 4.57% after increasing 20 basis points late last week in anticipation of the turmoil.
After notching their lows during the opening minutes, the major averages spent the first-half of the session in a steady climb with the Nasdaq (-0.3%) and Russell 2000 (-0.04%) pacing the rebound. The outperformance of the two indices was a recurring theme throughout the third quarter as the Nasdaq and Russell ended with respective gains of 10.8% and 9.9%.
All ten sectors settled in the red with consumer staples (-1.1%) leading to the downside. Meanwhile, other countercyclical groups ended mixed. Health care (-0.3%) and utilities (-0.1%) outperformed while telecom services (-0.6%) finished in-line.
The S&P 500 struggled with its 50-day moving average (1680) throughout the afternoon, but managed to close just above that level despite weakness among several cyclical sectors. Notably, energy, financials, and technology lost between 0.6% and 0.8% with energy leading to the downside as crude oil fell 0.5% to $102.32 per barrel.
Elsewhere, major financials lagged throughout the day. JPMorgan Chase (JPM 51.69, -0.55) was the weakest performer among the majors while the broader sector lost 0.7%.
Lastly, the technology sector saw some of its top components like Apple (AAPL 476.75, -6.00), Oracle (ORCL 33.17, -0.61), and Visa (V 191.10, -1.95) lose between 1.0% and 1.8%. Chipmakers withstood the bulk of the selling as the PHLX Semiconductor Index ended flat.
Treasuries ended little changed with the benchmark 10-yr yield down at 2.61%.
Trading volume surpassed the 200-day moving average of 728 million as 878 million shares changed hands on the floor of the New York Stock Exchange.
Economic data was limited to the September Chicago PMI report, which increased to 55.7 from 53.0 (Briefing.com consensus 53.7), representing the strongest reading since February. The Production Index improved to 58.0 from 53.0 with the increase completely due to continued strengthening in new orders.
The new orders index increased to 58.9 from 57.2. Another month of accelerating production gains may not be in the cards. Order backlogs have contracted each of the previous four months, putting the index at 46.7. Without a steady supply of backlogs, production gains will completely rely on new orders, and maintaining new orders at their current elevated levels may be difficult.
Tomorrow, August construction spending and the September ISM Index will both be reported at 10:00 ET.
Overnight Summary -- No Gov, No prob - world
equities mocking govt shutdown
The global equity markets are paying no mind to the US Govt shutdown. While officials and talking heads keep trying to figure out who to blame for the shutdown, equity markets are probably looking for who to thank. The reaction to the news was barely anything worth noting (futures were already higher), and those caught short will likely be scrambling if all stays status quo. The underlying fact is, while this poses frustration for all involved, the uncertainty of the situation as a whole most likely diminishes the chance of tapering, thus keeping the current stimulus package in full effect.
But even with that said, the global economy actually posted some decent data pts, which is also helping provide a boost to shares abroad. Starting in Japan, PM Abe moved forward with efforts to increase sales tax to 8%, starting in April. There is also high speculation to include some sort of economic stimulus package, which could include cash hand outs (must be nice...I will write my congressman..oops, I forgot, I can't). Also, the Tankan Survey came in better than expected, which continues to strengthen Abe's cause. China was closed for Golden Week, but the state released its PMI figure which came in below expectations, but still in expansion territory at 51.1. The Aussie was initially weaker on the release, but caught a bid when the RBA left rates unchanged and Retail Sales came in better than expected.
European bourses have been strong since the open, somewhat piggy-backing the US Futures lead, but markets are also supported by decent PMI figures in the major regions of Germany, France and even Italy. The only negative data pt worth noting was the slight uptick Germany's unemployment rate and and increase in the Unemployment change. Commodities are not having a tremendously eventful response to any of the news, almost seeming to take a wait and see stance and market participants arrive this morning
S&P Futures vs Fair Value: +8.00
10 yr Note: 2.65%
USD/JPY: 97.78 -0.46
EUR/USD: 1.3545 +0.0020
Europe: FTSE -0.2% DAX +0.6% CAC +0.7%
Asia: Hang Seng CLOSED Shanghai CLOSED Nikkei +0.2%
Commodities: Gold (1331.80 +4.90) Silver (21.79 +0.08) crude ($102.50 +0.17)
The global equity markets are paying no mind to the US Govt shutdown. While officials and talking heads keep trying to figure out who to blame for the shutdown, equity markets are probably looking for who to thank. The reaction to the news was barely anything worth noting (futures were already higher), and those caught short will likely be scrambling if all stays status quo. The underlying fact is, while this poses frustration for all involved, the uncertainty of the situation as a whole most likely diminishes the chance of tapering, thus keeping the current stimulus package in full effect.
But even with that said, the global economy actually posted some decent data pts, which is also helping provide a boost to shares abroad. Starting in Japan, PM Abe moved forward with efforts to increase sales tax to 8%, starting in April. There is also high speculation to include some sort of economic stimulus package, which could include cash hand outs (must be nice...I will write my congressman..oops, I forgot, I can't). Also, the Tankan Survey came in better than expected, which continues to strengthen Abe's cause. China was closed for Golden Week, but the state released its PMI figure which came in below expectations, but still in expansion territory at 51.1. The Aussie was initially weaker on the release, but caught a bid when the RBA left rates unchanged and Retail Sales came in better than expected.
European bourses have been strong since the open, somewhat piggy-backing the US Futures lead, but markets are also supported by decent PMI figures in the major regions of Germany, France and even Italy. The only negative data pt worth noting was the slight uptick Germany's unemployment rate and and increase in the Unemployment change. Commodities are not having a tremendously eventful response to any of the news, almost seeming to take a wait and see stance and market participants arrive this morning
S&P Futures vs Fair Value: +8.00
10 yr Note: 2.65%
USD/JPY: 97.78 -0.46
EUR/USD: 1.3545 +0.0020
Europe: FTSE -0.2% DAX +0.6% CAC +0.7%
Asia: Hang Seng CLOSED Shanghai CLOSED Nikkei +0.2%
Commodities: Gold (1331.80 +4.90) Silver (21.79 +0.08) crude ($102.50 +0.17)
Commodities
Closing
Commodities: Commodities Close Mostly Lower, Crude Oil Falls 0.5%
Precious metals and crude oil traded lower despite a weaker dollar index
as the U.S. federal government is on track to shut down at midnight
Dec gold slipped to a session low of $1322.00 per ounce in morning pit
trade and eventually settled with a 0.9% loss at $1326.00 per ounce.
Dec silver pushed into positive territory and to a session high of
$22.08 per ounce after brushing a session low of $21.43 in early morning floor
action. However, it fell back into the red and settled 0.4% lower at $21.73 per
ounce.
Nov crude oil extended Friday's losses, falling as low as $101.05 per
barrel in morning pit action. It inched higher as the session progressed and
settled with a 0.5% loss at $102.31 per barrel, just below its session high of
$102.38 per barrel.
Nov
natural gas also chopped around in negative territory, slipping to a session
low of $3.51 per MMBtu. It settled with a 0.8% loss at $3.56 per MMBtu.
COMEX
Metals Closing Prices
Dec gold fell $12.50 to $1326.00/ounce
·
Gold traded lower despite a weaker dollar index as the U.S.
federal government is on track to shut down at midnight. The yellow metal
slipped to a session low of $1322.00 in morning pit trade and eventually
settled with a 0.9% loss.
Dec silver fell $0.08 to $21.73/ounce
·
Silver pushed into positive territory and to a session high of $22.08
after brushing a session low of $21.43 in early morning floor action. However,
it fell back into the red and settled 0.4% lower.
Dec
copper fell 1 cent to $3.32/lbs
CBOT
Agriculture and Ethanol/ICE Sugar Closing Prices
·
Dec corn fell 12 cents to $4.42/bushel
·
Dec wheat fell 2 cents to $6.80/bushel
·
Nov soybeans fell 39 cents to $12.81/bushel
·
Nov ethanol fell 3 cents to $1.69/gallon
·
Nov sugar (#16 (U.S.)) settled unchanged at 21.00 cents/lbs
NYMEX
Energy Closing Prices
Nov crude oil fell $0.52 to $102.31/barrel
·
Crude oil extended Friday's losses as concerns over a potential
U.S. federal government shutdown at midnight weighed on prices. The energy
component touched a session low of $101.05 in morning pit action but inched
higher as the session progressed. It settled just below its session high of $102.38,
booking a loss of 0.5%.
Nov natural gas fell 3 cents to $3.56/MMBtu
·
Natural gas also chopped around in negative territory, falling as
low as $3.51. It brushed a session high of $3.57 moments before settling with a
0.8% loss.
Nov heating oil fell 1 cent to $2.97/gallon
Nov
RBOB gasoline fell 3 cents to $2.63/gallon
Treasuries
Next Day In View
Economic Commentary
World Econ Data
Japan
Japan
·
Aug Jobless Rate 4.1% vs
3.8% in Jul
·
Q3 Tankan Large Manuf Index
12 vs 4 in Q2
·
Sep Vehicle Sales +12.4% vs
-6.4% in Sep 2012
China
·
Sep Manuf PMI 51.1 vs 51 in
Aug
Aus
·
Aug Retail Sales +0.4% vs
+0.1% in Jul
Eurozone
·
Italy Sep PMI 50.8 vs 51.3
in Aug
·
France Sep PMI 49.8 vs 49.5
prelim
·
Germany Sep PMI 51.1 vs 51.3
prelim
·
Germany Sep Unemployment
rate 6.9% vs 6.8% in Aug
·
Eurozone Sep Unemployment
Rate 12.0% vs 12.1% in Aug
·
UK Sep Manuf PMI 56.7 vs
57.1 in Aug
U.S. Economic Data
Vehicle Sales (All Day)
Markit Manufacturing PMI (9am) - prelim 52.8
September ISM Index (10am)- Briefing.com consensus 55.0
August Construction Spending (10am)- Briefing.com consensus +0.4%
Vehicle Sales (All Day)
Markit Manufacturing PMI (9am) - prelim 52.8
September ISM Index (10am)- Briefing.com consensus 55.0
August Construction Spending (10am)- Briefing.com consensus +0.4%
Economic Summary: Chicago PMI tops
expectations as Government shutdown looms; Bernanke to speak Wednesday at 15:00
Economic Data Summary:
Economic Data Summary:
·
September Chicago PMI 55.7 vs Briefing.com consensus of 53.7;
August was 53.0
o That is the strongest
reading since February. The Briefing.com consensus expected the Chicago PMI to
increase to 53.7. The Production Index increased to 58.0 in September from 53.0
in August. The increase in production was completely due to continued
strengthening in new orders. The new orders index increased to 58.9 in
September from 57.2 in August.
Fed/Treasury Events Summary:
·
Government Shutdown Looming: The House took the 'clean' bill
passed by the Senate and added back in the Obamacare and Medical Tax portions
of their bill. This bill will be passed back to the Senate where it is unlikely
to be passed. So this will mean the government will shut down tonight unless an
agreement is reached.
Upcoming Economic Data:
·
September ISM Index due out Tuesday at 10:00 (Briefing.com
consensus of 55.0; August was 55.7)
·
August Construction Spending due out Tuesday at 10:00
(Briefing.com consensus of 0.4%; July was 0.6%)
Upcoming Fed/Treasury Events:
·
Boston Fed President Eric Rosengren (voting FOMC member,
typically dovish) to speak Wednesday at 12:00
·
Ben Bernanke to speak at St Louis Fed Conference Wednesday at
15:00
Other International Events of
Interest
·
China's HSBC Manufacturing PMI slipped to 50.2 from 51.2 (51.2
expected).
·
Germany's retail sales rose 0.5% month-over-month (0.8% consensus,
-0.2% prior) while the year-over-year reading ticked up 0.3% (0.4% forecast,
2.9% last).
·
Eurozone CPI increased 1.1% year-over-year (1.3% expected, 1.3%
prior) and core CPI rose 1.0% year-over-year (1.1% expected, 1.1% last).
On other news....
United Tech unit Pratt & Whitney awarded
$2.5 bln Defense Logistics Agency contract (107.82 -1.54)
Co has been awarded a
maximum $2,500,000,000 firm-fixed-price contract for various weapons systems
spare parts. This contract is a sole-source acquisition. Location of
performance is Connecticut with a Sept. 30, 2018 performance completion date.
Drybulk shippers are getting hit
this morning, following a sharp decline in capesize shipping rates for a third
consecutive day; Capesize rates are down 14% (or $5,786/day) in the last three
days, but still 245% higher (or +$27,473) since Aug 12
Overnight, capesize rates fell 4.2% (or $1,598/day) to $36,425/day, panamax rates fell 0.3% (or $48) to $14,388/day, while supramax rates rose 0.9% (or $100) to $11,279/day.
The overall BDI fell 2.1% (or 43 pts) to 2,003 overnight.
Stocks are trading as follows:FREE -7.2%, DRYS -5.5%, SBLK -4.8%, EGLE -4.3%, SHIP -3.8%, BALT -3.1%, DCIX -2.6%, DSX -2.7%, GNK -2.6%, SB -2.0%, PRGN -1.2%, SINO -0.8%, VLCCF -0.5%, KEX 0.5%.
Since August 12 (a recent low), the BDI is still up 101% to 2,003 (from 996), led by capesize rates. Meanwhile, capesize drybulk ship rates are still up 245% (or $27,473/day) to $38,023/day, also since Aug 12, largely driven by higher iron ore shipments to China out of Brazil and Australia.
But now, it's important to note that capesize shipping rates have declined $5,786/day over the last three days (this includes the data today, released overnight, Thurs and Fri).
Most drybulk shippers have different types of ships (e.g. capesize, panamax, handymax, supramax, etc):
Overnight, capesize rates fell 4.2% (or $1,598/day) to $36,425/day, panamax rates fell 0.3% (or $48) to $14,388/day, while supramax rates rose 0.9% (or $100) to $11,279/day.
The overall BDI fell 2.1% (or 43 pts) to 2,003 overnight.
Stocks are trading as follows:FREE -7.2%, DRYS -5.5%, SBLK -4.8%, EGLE -4.3%, SHIP -3.8%, BALT -3.1%, DCIX -2.6%, DSX -2.7%, GNK -2.6%, SB -2.0%, PRGN -1.2%, SINO -0.8%, VLCCF -0.5%, KEX 0.5%.
Since August 12 (a recent low), the BDI is still up 101% to 2,003 (from 996), led by capesize rates. Meanwhile, capesize drybulk ship rates are still up 245% (or $27,473/day) to $38,023/day, also since Aug 12, largely driven by higher iron ore shipments to China out of Brazil and Australia.
But now, it's important to note that capesize shipping rates have declined $5,786/day over the last three days (this includes the data today, released overnight, Thurs and Fri).
Most drybulk shippers have different types of ships (e.g. capesize, panamax, handymax, supramax, etc):
·
The companies with capesize ships include DSX, DRYS, GNK, SBLK,
NMM and NM
·
Shippers that have Panamax ships are DRYS, DSX, GNK, NM, PRGN, NMM
and SB
·
Shipping companies with exposure to both Capesize and Panamax
ships include DRYS, DSX, NMM and NM
Currencies
Dollar
Slips as Government Shutdown Nears: 10-yr: +01/32..2.626%..USD/JPY:
98.30..EUR/USD: 1.3525
The Dollar Index has seen a steady climb higher throughout today's session, but still remains on track for its worst close in eight months as a government shutdown nears. Early weakness dropped the Index onto the 80.00 level, but that area was able to hold as action now takes place near 80.20. Click here to see a daily Dollar Index chart.
The Dollar Index has seen a steady climb higher throughout today's session, but still remains on track for its worst close in eight months as a government shutdown nears. Early weakness dropped the Index onto the 80.00 level, but that area was able to hold as action now takes place near 80.20. Click here to see a daily Dollar Index chart.
·
EURUSD is +5 pips at 1.3530 as trade looks as though it will post its
best close since the beginning of February. The single currency has been able
to shake off concerns of a snap election in Italy as former Prime
Minister Silvio Berlusconi fights for his political life. Headlines
out of Italy are definitely something to pay attention to as rumors of
a sovereign downgrade continue to make the rounds. Many remain on the
sidelines as action has been locked in a tight range between 1.3450/1.3550 over
the past two weeks as traders awaits Wednesday's ECB rate decision. Eurozone
data is plentiful with the unemployment rate and Final Manufacturing PMI data
due out from across the region.
·
GBPUSD is +40 pips at 1.6190 with action ready to post its best
close since the first trading day of the year. Over the past couple of
months sterling has been the beneficiary of mostly better than expected data,
which has lifted the pair more than 1300 pips since the beginning of July. The
1.6300 area is setting up as a key level as trade has not closed above the mark
since August 2011. Britain's Manufacturing PMI will be released tomorrow.
·
USDCHF is -10 pips at .9040 with today's weakness putting the pair on
track for its lowest close in 18 months. The pair has been unable to
gain any sort of momentum as sellers have held control in 13 of the past 17
sessions. Swiss data is limited to SVME PMI.
·
USDJPY is +10 pips at 98.35 with action erasing all of its early losses.
The pair dipped to 97.50 in early trade, but looks likely to avoid its worst
close in a month. Headlines out during today's session indicate Japan's
ruling coalition have agreed in JPY1 trln in tax breaks, but so far
the pair has seen little response to the news. Japanese data includes average
cash earnings, household spending, Tankan Manufacturing Index, and Tankan
Non-Manufacturing Index.
·
AUDUSD is +20 pips at .9335 amid an uneventful trade. The hard currency
survived an early test of .9300 support that is helped by the 100-day moving
average, but for the most part trade has been rather lackluster as traders
await tonight's Reserve Bank of Australia rate decision. No
change is expected from the current 2.50%. Data is limited to retail
sales. Chinese banks are closed for Golden Week, but Manufacturing PMI
is still scheduled to cross the wires tomorrow.
·
USDCAD is -5 pips at 1.0295 as light selling persists for a third
session. The pair was holding small gains ahead of this morning's data, but
slipped into the red after the in-line GDP data (0.6%). The
1.0225 level remains key as trendline support aids the 200-day moving average.
Jason's Commentaries
The Red Monday came at a very bearish start with futures down more than 1% at the open. The fear of the shutdown quickly reversed after the market opened. The reversal managed to wipe out more than 40% of its losses at its highest. However, after that covering, market sold back down to ground zero again. As the government is being shutdown, there might not be release of some key economic reports that are due to be released this week. Namely the Non-farm payrolls. All sectors came in red last night. Utilities was the smallest loser while the staples was the strongest laggard. Volumes were standing over 830m shares traded on the NYSE, however internals were showing not too much of a bear day. VIX opened up higher but lost most of its gains. Possibly the market is still bullish. However, in the pre market, futures managed to regain some of its lost grounds, having a 0.4% gain at its highest. However, at 8am ET, the gain in futures is already down to 0.22% gain. I guess today will likely be a tough fight between the bulls and the bears today.
What a red red Monday. The fear of US government shut down came true. The Federal Government began its partial shutdown.
http://www.marketwatch.com/story/us-government-begins-partial-shutdown-2013-10-01-0103166?dist=beforebell
Market Call: FLAT to downside
Date: 1 Oct 2013
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