Global Markets Overview – 1/10/14

Equities remain mixed heading into the non-farm payrolls data. Expectations are riding high after the private payrolls reading released yesterday smashed estimates. Unemployment claims data released in US trade also showed some positive signs coming in at a lower-than-expected 330,000 (versus 337,000), lowering the four-week moving average to 349,000. All this positive data continues to support the argument that perhaps the US economy is ready for a rapid measured winding back of stimulus.

A lot of weight now falls on the official non-farm payrolls reading which is due out later today. Current expectations are for 197,000 jobs to be added, with the unemployment rate flat at 7%. Goldman Sachs has upped its estimate to 200,000 and Deutsche Bank to 250,000. A bumper jobs reading would probably push the USD higher against the majors, with USD/JPY being the most significant pair to watch. The S&P has been up in the last eight payrolls release sessions, and it will be interesting to see if this run continues.

ECB language little changed

Price action in the euro was whippy to say the least, as traders reacted to the ECB's dovish tone. EUR/USD plunged to 1.3548, but has since recovered to around 1.36. The ECB kept policy unchanged and emphasised it will maintain an accommodative stance of monetary policy for as long as necessary. This wasn't really enough to inspire any further single currency selling as the ECB had already indicated its dovish stance in the past. What would have probably made a difference is if the ECB had discussed what unconventional measures it is exploring to help ignite the economy.

AUD/USD is holding on to 0.89 early in Asian trade with another interesting day of data ahead. A benign CPI reading from China yesterday to an extent reduces pressure for further tightening and could prove to be a positive for risk in coming months. Today we get China's trade data for December with a surplus of 32.6 billion expected. We might also get new loans and money supply data at some point.

Mildly weaker start for the ASX 200

Ahead of the open we are calling the ASX down around five points at 5319. The index edged higher in the dying minutes of trade yesterday and managed to close at its highs of the session. While the lead from US trade is more to the downside, some investors might be looking to position themselves ahead of the jobs release which might be well received judging by the S&P's performance over the past eight releases. Commodities continued to struggle, suggesting we could see resource names struggle yet again today. However, with China data on the cards this could turn very quickly. Gold snapped its losing streak and this could lift some of the gold names today.

FOX has announced it plans to delist from the ASX 200, subject to approval from Class B voting stock holders. Delisting is expected to occur in April or May if passed, with approval needing more than 50% of the Class B voting stock. Rupert Murdoch can vote and he holds 39.6% of all stock. It seems logical to think the stock could see downside on open.

Market	Price at 6:00am AEST	Change Since Australian Market Close	Percentage Change
AUD/USD	0.8900	0.0022	0.25%
USD/JPY	104.8000	-0.0700	-0.07%
ASX (cash)	5318	-7	-0.13%
US DOW (cash)	16456	-15	-0.09%
US S&P (cash)	1839.0	0.5	0.03%
UK FTSE (cash)	6708	-20	-0.30%
German DAX (cash)	9459	-40	-0.42%
Japan 225 (cash)	15873	17	0.10%
Rio Tinto Plc (London)	31.33	-0.57	-1.80%
BHP Billiton Plc (London)	18.06	-0.05	-0.30%
BHP Billiton Ltd. ADR (US) (AUD)	36.48	-0.49	-1.32%
US Light Crude Oil (February)	92.32	-0.35	-0.38%
Gold (spot)	1228.00	1.0	0.08%
Aluminium (London)	1750	-25	-1.39%
Copper (London)	7213	-116	-1.59%
Nickel (London)	13350	-116	-0.86%
Zinc (London)	2010	-22	-1.10%
Iron Ore	131	-0.5	-0.38%