ETX Capital Daily Market Bite, 10th May, 2013: Markets Advance, Again; US Dollar Beating The Yen
May 10, 2013 10:35 am
May 10th 2013, Daily Market Bite from Ishaq Siddiqi Market Strategist
European stock markets continued to advance on Friday with key indices posting fresh highs for the year, the FTSE100 firmly above the 6600 level, the DAX now above 8300 while US stock futures indicate a firm open this afternoon despite the lack of economic data out from the country later this afternoon. The US dollar breached above the 100 mark against the yen for the first time in four years following yesterday’s weekly jobless claims data which showed further stabilization in the US labour market. The weaker yen lifted Japanese exports in turn helping the Nikkei index shoot up to fresh multi-year highs.
US equity markets remain at all-time highs, supported by Federal Reserve stimulus and signs of an economic recovery. That said, remarks out of Fed members such as Charles Plosser yesterday indicating that he favours tempering the pace of stimulus did weigh on US markets in the previous session. Fed members are clearly divided over the pace of stimulus in the months ahead as the US economy is showing signs of recovery but need to see further evidence of this before turning the liquidity taps off.
Traders on the other hand, are encouraged by the fresh optimism over the US economy not needing Fed money as a prolonged open-ended stimulus programme can do more harm than good when it comes to causing asset price inflation and potentially derailing the economic recovery there. At the same time, there appears to be enough central bank activism even if you take the Fed out of the pool — The BOJ plan to continue aggressive easing, the Bank of England could fire stimulus and haven’t strongly hinted at ending stimulus measures while the ECB has vowed to do whatever it takes to protect the euro zone, be it more rate cuts or negative deposit rates.
Data today has been generally favourable to price-action: German trade activity picked up pace in March with exports and imports both rising, confirming a brighter start of the Q2 for the German economy and following the string of solid data this week such as industrial output and factory orders. In the UK, after last week’s upbeat business and confidence surveys, today’s trade data provided a healthier picture of imports and exports by the country. Net trade is now likely to have boosted GDP in the Q1 for the UK, a day after we had data suggesting the manufacturing and industrial output activity also fared better.
As such, it is likely we will see an upward revision to Q1 GDP but this does also mean that the BOE will refrain from changing policies anytime soon. Aside from economic data, corporate news has provided a healthy boost to European share markets too — shares in ArcelorMittal, BT Group, Novartis and Generali all advanced after respectable earnings. Attention later in the day will turn to Fed chairman Ben Bernanke’s keynote speech at the Chicago Fed annual banking conference and this weekend’s G7 meeting taking place right here, in the UK.
May 10th 2013, Daily Market Bite from Ishaq Siddiqi Market Strategist
European stock markets continued to advance on Friday with key indices posting fresh highs for the year, the FTSE100 firmly above the 6600 level, the DAX now above 8300 while US stock futures indicate a firm open this afternoon despite the lack of economic data out from the country later this afternoon. The US dollar breached above the 100 mark against the yen for the first time in four years following yesterday’s weekly jobless claims data which showed further stabilization in the US labour market. The weaker yen lifted Japanese exports in turn helping the Nikkei index shoot up to fresh multi-year highs.
US equity markets remain at all-time highs, supported by Federal Reserve stimulus and signs of an economic recovery. That said, remarks out of Fed members such as Charles Plosser yesterday indicating that he favours tempering the pace of stimulus did weigh on US markets in the previous session. Fed members are clearly divided over the pace of stimulus in the months ahead as the US economy is showing signs of recovery but need to see further evidence of this before turning the liquidity taps off.
Traders on the other hand, are encouraged by the fresh optimism over the US economy not needing Fed money as a prolonged open-ended stimulus programme can do more harm than good when it comes to causing asset price inflation and potentially derailing the economic recovery there. At the same time, there appears to be enough central bank activism even if you take the Fed out of the pool — The BOJ plan to continue aggressive easing, the Bank of England could fire stimulus and haven’t strongly hinted at ending stimulus measures while the ECB has vowed to do whatever it takes to protect the euro zone, be it more rate cuts or negative deposit rates.
Data today has been generally favourable to price-action: German trade activity picked up pace in March with exports and imports both rising, confirming a brighter start of the Q2 for the German economy and following the string of solid data this week such as industrial output and factory orders. In the UK, after last week’s upbeat business and confidence surveys, today’s trade data provided a healthier picture of imports and exports by the country. Net trade is now likely to have boosted GDP in the Q1 for the UK, a day after we had data suggesting the manufacturing and industrial output activity also fared better.
As such, it is likely we will see an upward revision to Q1 GDP but this does also mean that the BOE will refrain from changing policies anytime soon. Aside from economic data, corporate news has provided a healthy boost to European share markets too — shares in ArcelorMittal, BT Group, Novartis and Generali all advanced after respectable earnings. Attention later in the day will turn to Fed chairman Ben Bernanke’s keynote speech at the Chicago Fed annual banking conference and this weekend’s G7 meeting taking place right here, in the UK.
Visit http://www.etxcapital.co.uk/
Find us on social media to be kept up to date with the latest ETX Capital news:
Facebook: https://www.facebook.com/#!/ETXCapitalGroup
Twitter: https://twitter.com/#!/etxcapital
LinkedIn: http://www.linkedin.com/company/445425?trk=tyah
ETX Capital’s RSS site: http://my.etxcapital.co.uk/
Related Posts: