Global Markets Overview – December 11, 2014
Oil slip rocks equities
Global markets continued to slide as oil slipped further and Greek bond yields spiked. Crude oil inventories released in the US showed a surplus of 1.5 million when the market was expecting a deficit of 2.6 million. This saw WTI slump over 4%, with oil prices trading at their lowest since mid-2009.
The situation for oil is looking even direr as demand is now also showing signs of waning - the issue was previously limited to the supply side. Energy names were predictably hit and the negative sentiment resulting from this sparked all-round weakness. A narrower-than-expected US federal budget deficit was hardly acknowledged.
The pessimism in Europe continued on Greek political concerns and French industrial production missed estimates by a long way. Despite the weakness in risk, the greenback continued to lose some ground to the risk currencies. USD/JPY retreated even further and is now trading under ¥118.00. This will keep Japanese equities on the back foot and we are currently calling the Nikkei down 1.5%. Support for USD/JPY comes in closer to ¥117.00, where an uptrend from October kicks in.
AUD focuses on jobs
AUD/USD managed to hold on to the $0.8300 handle and will be in focustoday, with local jobs numbers due out at 11.30am. The market is expecting 15,000 jobs added and for the unemployment rate to rise to 6.3%. Any further signs of cracks in the jobs market could see the downward spiral in AUD/USD resume.
This week's low for the pair was $0.8224 and that'll be the level to look out for in the near term. It's a fairly quiet day for China but investors will continue to assess the drop in inflation and the continuing rise in interbank rates.
Two month lows for the ASX 200
Ahead of the local market open we are calling the ASX 200 down 1.4% at 5193. Should we close below 5200, we could potentially trade down to October lows again in the 5122 region. The energy space will predictably be under pressure as it reacts to renewed weakness in crude oil prices.
Outside of the energy space, I don't expect to see much reprieve for materials and recent choppy trade is likely to continue. Any rates repricing could have an impact on the banks and other interest rate sensitive sectors iftoday's jobs numbers significantly differ from estimates.
Asian markets opening call | Price at 8:00am AEDT | Change from the Offical market close | Percentage Change |
Australia 200 cash (ASX 200) | 5,190.90 | -68 | -1.29% |
Japan 225 (Nikkei) | 17,162.50 | -251 | -1.44% |
Hong Kong HS 50 cash (Hang Seng) | 23,149.10 | -375 | -1.60% |
China H-shares cash | 11,198.70 | -174 | -1.53% |
Singapore Blue Chip cash (MSCI Singapore) | 375.22 | -2 | -0.47% |
US and Europe Market Calls | Price at 8:00am AEDT | Change Since Australian Market Close | Percentage Change |
WALL STREET (cash) (Dow) | 17,533.90 | -236 | -1.35% |
US 500 (cash) (S&P) | 2,025.84 | -30 | -1.54% |
UK FTSE (cash) | 6,468.00 | -80 | -1.22% |
German DAX (cash) | 9,746.90 | -113 | -1.15% |
Futures Markets | Price at 8:00am AEDT | Change Since Australian Market Close | Percentage Change |
Dow Jones Futures (December) | 17,540.50 | -223.50 | -1.26% |
S&P Futures (December) | 2,026.13 | -29.75 | -1.45% |
ASX SPI Futures (December) | 5,193.00 | -60.00 | -1.14% |
NKY 225 Futures (December) | 17,165.00 | -230.00 | -1.32% |
Key inputs for the upcoming Australian trading session (Change are from 16:00 AEDT) | Price at 8:00am AEDT | Change Since Australian Market Close | Percentage Change |
AUD/USD | $0.8317 | 0.0005 | 0.06% |
USD/JPY | ¥117.845 | -1.115 | -0.94% |
Rio Tinto Plc (London) | £28.49 | -0.01 | -0.03% |
BHP Billiton Plc (London) | £14.33 | 0.19 | 1.34% |
BHP Billiton Ltd. ADR (US) (AUD) | $28.67 | -0.82 | -2.78% |
Gold (spot) | $1,225.90 | -5.30 | -0.43% |
Brent Crude (January) | $64.42 | -1.75 | -2.64% |
Aluminium (London) | 1961.75 | -10.25 | -0.52% |
Copper (London) | 6417 | -50.50 | -0.78% |
Nickel (London) | 16350 | -210.00 | -1.27% |
Zinc (London) | 2184 | -44.50 | -2.00% |
Iron Ore (62%Fe Qingdao) | $69.14 | 0.08 | 0.12% |
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