Global Markets Overview – 5/15/14

  • Rate this Story
  • 0
  • 0

By Stan Shamu, IG Markets Strategist | May 15, 2014 9:17 AM EST

US equities finally pulled back from record highs, while bonds gained resulting in US treasury yields dropping around seven basis points to their lowest level in six months. Losses in the US were mainly pinned on renewed weakness in the small caps, which encouraged some profit taking across equities. When equities are at record highs, any source of concern generally triggers profit-taking.

There was also some notable activity in the UK where BoE Governor Mark Carney came in much more dovish than what the market was expecting. While acknowledging the UK economic recovery, Carney suggested muted inflation pressure and a subdued jobs market means a rate hike is not imminent. As a result, the sterling came off a big figure, with cable dropping to 1.677.

New Zealand budget in focus

The main event for Asia today will perhaps be our neighbour's annual budget release. The NZD will be in focus with analysts tipping a fairly hawkish budget. In sharp contrast to our budget, the NZ government is likely to forecast a surplus for 2014-2015. Given the significant challenges the country was facing with an earthquake not too long ago, this is quite impressive. As a result, keep a close eye on NZD crosses today, with potential for renewed NZD strength.

There will be a bit of activity in Japan yet again after USD/JPY dropped back below the 102 level. This will weigh on the Nikkei early, which we are currently calling down 1.1% at 14,248. There is quite a bit of data to look out for from Japan today starting with GDP, tertiary industry activity and consumer confidence. This will then be followed by BoJ Governor Kuroda's speech later in the day where he is likely to reiterate the economic recovery and the BoJ's readiness to step in if needed. Perhaps this might have some bearing on the yen and Japanese equities.

Banks and miners in focus

Ahead of the open we are calling the ASX 200 down 0.4% to 5474. Yesterday's performance was a bit skewed by the big dividend that came out of the market. The banks will be watched closely once again with CBA at record levels while WBC, MQG and NAB might recover after trading ex-dividend yesterday. CBA will be at risk of some profit taking after the recent run. Gold and iron ore both had a stellar night and some of the miners might catch a tail wind from this recovery. Copper also continued its run while nickel finally pulled back. BHP's ADR is actually pointing up 0.2% to 38.38. Healthcare names, particularly PRY and SHL, will remain in the spotlight after sharp falls yesterday due to some changes in the budget. Key support levels will be tested and the bulls will be tasked to defend them. On the earnings front we have Graincorp's 1H earnings, SPN's FY earnings and Paladin's 3Q update.

Asian markets opening call

Price at 8:00am AEDT

Change from the Offical market close

Percentage Change

Australia 200 cash (ASX 200)

5,473.60

-23

-0.42%

Japan 225 (Nikkei)

14,247.70

-158

-1.10%

Hong Kong HS 50 cash (Hang Seng)

22,593.50

11

0.05%

China H-shares cash

9,947.90

-44

-0.44%

Singapore Blue Chip cash (MSCI Singapore)

371.60

1

0.35%

US and Europe Market Calls

Price at 8:00am AEDT

Change Since Australian Market Close

Percentage Change

WALL STREET (cash) (Dow)

16,620.60

-103

-0.62%

US 500 (cash) (S&P)

1,889.09

-11

-0.57%

UK FTSE (cash)

6,871.80

5

0.07%

German DAX (cash)

9,739.70

-31

-0.31%

Futures Markets

Price at 8:00am AEDT

Change Since Australian Market Close

Percentage Change

Dow Jones Futures (June)

16,588.00

-99.00

-0.59%

S&P Futures (June)

1,886.13

-10.25

-0.54%

ASX SPI Futures (June)

5,489.00

-21.50

-0.39%

NKY 225 Futures  (June)

14,292.50

-115.00

-0.80%

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

$0.9377

-0.0026

-0.29%

USD/JPY

¥101.850

-0.295

-0.29%

Rio Tinto Plc (London)

£33.50

0.20

0.59%

BHP Billiton Plc (London)

£19.80

0.15

0.74%

BHP Billiton Ltd. ADR (US) (AUD)

$38.38

0.08

0.20%

Gold (spot)

$1,305.60

10.20

0.79%

Aluminium (London)

1804

24.00

1.35%

Copper (London)

6895

56.25

0.82%

Nickel (London)

19625

-1265.00

-6.06%

Zinc (London)

2092

29.25

1.42%

Iron Ore (62%Fe)

103.5

0.50

0.49%

 [Kick off your trading day with our newsletter]

More from IBT Markets:

Follow us on Facebook

Follow us on Twitter

Subscribe to get this delivered to your inbox daily

(Photo: REUTERS / )
Leon Cooperman, the billionaire founder of Omega Advisors, and Jack Bogle, the retired CEO and founder of Vanguard, are having it out over what the 2012 presidential election's impacts will be on the stock market. This photograph does not depict Cooperman or Bogle
  • Rate this Story
  • 0
  • 0
Copyright IG Markets All rights reserved, get CFD Trading account

Join the Conversation

IBTimes TV
E-Newsletters

We value your privacy. Your email address will not be shared.