AM Report 10th March 15

ajz

Fairly calm overnight after Friday and yesterday’s shenanigans (described by the AFR as ‘horror’ without even the slightest hint of hyperbole). European equities drifted lower and US equities put on tiny gains amidst thin volume, Apple releasing a watch apparently not enough to cause a rush back into stocks that are now 1.4% ‘better value’…….!

The ECB commenced its open market QE and the results? Well, they left a little to be desired……German Bund yields were crushed, closing at 0.31% whilst peripheral yields were either unchanged or tearing higher. Wider peripheral spreads not exactly the result they were after I’m guessing?! Greece came in for some special attention with the weekend’s comments that they could go back to the polls rattling punters even though they have the implicit ECB put option (supposedly).

Fx was for the most part was a ghost town. GBP and USDJPY were the only standouts amongst the G10, GBP because it spent the entire session grinding higher, finishing with a ~90pt gain and USDJPY because it is giving every impression that it will shortly break to a fresh cycle and eight-ish year high above 121.85.   

Gold tried to claw back some of yesterday’s pummelling but failed, ending unchanged on the session with silver equally gloomy though platinum and palladium both put on a couple of bucks. Interestingly enough base metals managed to rally with copper outperforming (+2.2%) and both crude benchmarks were muted, Brent going slightly lower and WTI unchanged.  

For the day ahead NAB releases its Aussie business confidence survey at 1130, Chinese official CPI and PPI for Feb at 1230 (exp +1% & -4.3% resp) and tonight French and Italian IP, US JOLTS job survey (a Fed favourite apparently) and a speech from BoE gov Mark Carney from 0135 Sydney time.

The SPI finished at 5827, up 12pts overnight. At the moment rallies are there to be sold and anywhere from 5840 to 5860 looks pretty good. Downside I’d still be looking for move to 5770 initially and if it did happen to slip beneath 5700 in the coming days there is only thin air below….