Global Markets: 

  • Asian stock markets: Nikkei up 0.85 %, Shanghai Composite gained 0.30 %, Hang Seng declined 0.20 %, ASX up 0.50 %
  • Commodities: Gold at $1230 (+0.10 %), Silver at $17.24 (+0.50 %), Crude Oil at $81.56 (-0.65 %)
  • Rates: US 10 year yield at 2.252, German 10 year yield at 0.905, UK 10 year yield at 2.246

News & Data: 

  • New Zealand Trade Balance MoM -1.3bln, Expected: -700mln, Previous: -472mln
  • New Zealand Exports 3.61bln, Expected: 3.50bln, Previous: 3.52bln
  • New Zealand Imports 4.96bln, Expected: 4.20bln, Previous: 3.99bln
  • China House Prices -1.3 %, Previous: 0.5 %

Markets Overview: 

Reports about the first Ebola patient in New York City drove S&P 500 futures lower overnight, while the US 10 year yield rose above 2.25. Asian stock markets are mixed, but the Nikkei and Shanghai Comp are both up on the day. Meanwhile, precious metals remain weak. Gold has failed to sustain momentum above $1250 and some analysts note that it could continue to perform poorly for a while given that inflation in the major economies remains low. Gold is seen as most attractive during times of rising inflation.

In FX, leveraged names sold the AUD/USD and cleared the stops through 0.8740. The pair hit into good bids ahead of the 0.8720 level and is now back in the middle of the range. It is unlikely that it will be stuck in this small range for much longer given the amount of event risk next week. 0.8700 and 0.8820 are the key levels to watch for.

NZD/USD bounced a bit as 0.78 support held and leveraged names booked profits in AUD/NZD. In USD/JPY, a WSJ report that the Bank of Japan sees a bigger chance of inflation falling below 1 % drove the pair to fresh highs at 108.35, as traders were betting on further stimulus from the BoJ. Japanese traders didn’t buy the story and most analysts see further easing this year unlikely. The pair declined to 107.85 overnight. Bids reported at 107.80 and in better size towards 107.50.

Upcoming Events: 

  • 08:30 GMT – UK GDP (0.7 QoQ, 3.0 % YoY)
  • 14:00 GMT – US New Home Sales (-5.8 % MoM, 470k)