Global Markets Overview – November 7, 2014

IN PHOTO: A metal sculpture depicting a stock exchange chart is seen in the reception hall of the Athens Bourse in Athens September 11, 2014. Greece on Thursday set the pricing on its offer to top up its recent three- and five-year bonds by about 1 billion euros (US$1.3 billion) and exchange them for outstanding T-bills instead of cash. Reuters/Yorgos Karahalis

It was a busy night for global markets, as investors digested a raft of releases and events from Europe and the US. In Europe, the BoE and ECB both kept policy unchanged. However, the latter's press conference drew significant attention, as the central bank said it expects its balance sheet to move towards 2012 levels. Essentially, this implies the balance sheet is set to increase by around a trillion euros. At the same time, the ECB reinforced its commitment to using other unconventional policies if necessary. Additionally, Mario Draghi described the commitment from the committee as unanimous, which suggests talk of a rift, earlier in the week, may have been overdone. However, some analysts felt the lack of commentary around sovereign bond purchases was a bit of a dampener. In the US, data continued to tick along with unemployment claims falling more than expected and bringing the four-week average down to 279,000. Optimism is running hot heading into today's official non-farm payrolls print. Average hourly earnings will also carry some weight, as they feed through to inflation. Fed chair Janet Yellen will speak shortly after the jobs data release.

Euro extends losses

Price action wise, EUR/USD slipped further and is now trading below $1.2400. There isn't much of a reason to be holding onto euros at the moment and the latest comments from the ECB reinforced that. This is the lowest since August 2012 and I feel traders will continue to sell the pair into strength. I expect to see further volatility in the pair today with quite a bit of activity on both sides of the equation. In Europe, we have German and French industrial production along with ECOFIN meetings. USD/JPY hit a high of ¥115.52 and will remain in focus heading into the payrolls data. This should also see the Nikkei pop higher at the open.

Big dividend for the ASX 200

Ahead of the local market open, we are calling the ASX 200 up 0.3% at 5,520. This takes into account around 20 points worth of dividends that come out of the physical market today. Our call has already been adjusted for this. The weakness we have been seeing through the commodities space this week will remain a factor but, for today, we could see some short covering, following the bounce in risk. I would remain sceptical about how far this move will run. Strength in the greenback also impacted AUD/USD which is back below $0.8600 heading into today's RBA monetary policy statement. I would, however, advise being cautious on shorts, ahead of today's statement, as some analysts feel we could possibly get upgrades to inflation expectations and GDP.

Asian markets opening call	Price at 8:00am AEDT	Change from the Offical market close	Percentage Change
Australia 200 cash (ASX 200)	5,520.00	14	0.25%
Japan 225 (Nikkei)	16,923.50	131	0.78%
Hong Kong HS 50 cash (Hang Seng)	23,705.90	57	0.24%
China H-shares cash	10,597.30	29	0.27%
Singapore Blue Chip cash (MSCI Singapore)	371.86	1	0.28%
US and Europe Market Calls	Price at 8:00am AEDT	Change Since Australian Market Close	Percentage Change
WALL STREET (cash) (Dow)	17,533.50	97	0.56%
US 500 (cash) (S&P)	2,028.28	10	0.49%
UK FTSE (cash)	6,556.80	38	0.58%
German DAX (cash)	9,387.00	107	1.15%
Futures Markets	Price at 8:00am AEDT	Change Since Australian Market Close	Percentage Change
Dow Jones Futures (December)	17,476.50	96.50	0.56%
S&P Futures (December)	2,023.88	9.75	0.48%
ASX SPI Futures (December)	5,519.50	31.00	0.60%
NKY 225 Futures (December)	16,975.00	87.50	0.52%
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	$0.8571	-0.0036	-0.41%
USD/JPY	¥114.995	0.475	0.41%
Rio Tinto Plc (London)	£29.66	-0.22	-0.74%
BHP Billiton Plc (London)	£16.28	0.08	0.49%
BHP Billiton Ltd. ADR (US) (AUD)	$33.84	0.06	0.16%
Gold (spot)	$1,145.15	0.30	0.03%
Brent Crude (December)	$82.83	-0.27	-0.32%
Aluminium (London)	2072.25	13.25	0.64%
Copper (London)	6642	14.00	0.21%
Nickel (London)	15477	142.00	0.93%
Zinc (London)	2225.5	-4.25	-0.19%
Iron Ore (62%Fe)	75.6	-0.40	-0.53%