Tag Archives: Japan

article 3 months old

Next Week At A Glance

For a more comprehensive preview of next week's events, please refer to "The Monday Report", published each Monday morning. For all economic data release dates, ex-div dates and times and other relevant information, please refer to the FNArena Calendar.


By Greg Peel

Well here it comes, we hope. On Wednesday night the Fed will announce a 25 basis point rate rise. At least that’s what all the world believes. Janet Yellen will hold a press conference. The Fed will also provide a quarterly update of forecasts so assuming the rate hike is a given, the focus of attention will be on the pace of further hikes to come based on FOMC projections.

Tonight sees important retail sales numbers in the US, along with consumer sentiment and the PPI, but at this stage they are unlikely to impact on the Fed’s decision.

Tomorrow sees Beijing delivering China’s November industrial production, retail sales and fixed asset investment numbers.

Throughout the week, US releases include the CPI, housing sentiment and starts, industrial production and the Empire State and Philly Fed activity indices. Friday’s brings the quadruple witching derivatives expiry which can often lead to volatility.

Europe will be keeping an eye on inflation data, as well as the German IFO business and ZEW investor sentiment surveys, for clues as to whether the ECB may yet up the QE ante.

The Bank of Japan meets next week but no policy change is expected.

The local market will also see a “quadruple witching” on Thursday as quarterly futures, futures options, index options and stock options all expire together. On Friday changes to S&P/ASX index constituents, announced last week, will become effective.

On the economic front, the release of the minutes of that last RBA meeting and an RBA Bulletin will be the highlights.

National Australia Bank ((NAB)) is among a handful of companies holding AGMs next week.
 

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article 3 months old

The Overnight Report: Dashing Through The Snow

By Greg Peel

The Dow closed up 168 points or 1.0% while the S&P gained 1.1% to 2102 and the Nasdaq added 0.9%.

Buy Australia

It’s unclear exactly who waved the flag, but whatever the case offshore investors decided yesterday, the First of December, was the day to Buy Australia after a period of weakness for the local index. That weakness has been as much due to company specific issues (think BHP, Woolworths for example) as it has to any macro consideration. And the fact the 5% fall in the Chinese stock market last week now appears to be a blip likely helped.

The investment strategy of yesterday’s buyers becomes clear if we break down the sector moves. The winners were consumer staples (2.8%), telcos (2.4%), consumer discretionary (2.3%), materials (2.3%) and financials (2.1%). We then drop to energy (1.5%) and thereafter, no sector move exceeded 1%.

In the big movers we see an intersection of the subsets of yield (staples, telco, banks and big miners, although don’t count your chickens on the last one) and beaten-down large caps (banks, BHP, Woolies). The consumer sector moves also provide evidence of short-covering (Metcash, Dick Smith).

 We also see evidence of the offshore element in an Aussie dollar that is up a full cent to US$0.7327 over 24 hours. Some of that is overnight due to the US dollar index being down 0.4% to 99.76, and some of it was due to yesterday afternoon’s “on hold” from the RBA. But the currency moved steadily up all day.

Yesterday’s RBA rate decision did not come into play in the local equity market. The ASX200 was up a hundred points by lunchtime and held that through the afternoon rate decision. But the statement did confirm stock market investors have the luxury of knowing the “RBA Put” remains in place. Glenn Stevens could not have made it any clearer:

“At today's meeting the Board again judged that the prospects for an improvement in economic conditions had firmed a little over recent months and that leaving the cash rate unchanged was appropriate. Members also observed that the outlook for inflation may afford scope for further easing of policy, should that be appropriate to lend support to demand.”

Everyone’s a winner.

In terms of economic conditions that have “firmed”, yesterday’s local data releases supported that thesis.

Australia’s current account deficit did not narrow in the September quarter by as much as economists had forecast but the terms of trade suggested a sizeable 1.5ppt contribution to today’s GDP result, ahead of 1.2ppt predictions. With all the angst created by falling commodity prices, it is often lost on observers that export volumes remain robust, and that the lower Aussie is offsetting price falls.

Australia’s manufacturing PMI improved for the fifth consecutive month in November, rising to 52.5 from 50.2 in October.

Building approvals rose 3.9% in October, against expectations of an easing. The annual pace of approvals has nevertheless eased to 12.3% from 21.4% in September, but this reflects lumpy apartment block approvals. A cooling in runaway apartment block construction is not a bad thing as it alleviates “bubble” fears. Ditto a 1.5% drop in average house prices. Construction will continue to support the economy for a little while yet, but not scare economists or the RBA.

Consensus forecasts for today’s September quarter GDP result are for 0.8% quarterly growth and 2.4% annual growth.

Disappointment

To the north, China’s economy is not showing signs of “firming”.

Beijing’s official manufacturing PMI slipped to 49.6 from 49.8 last month when economists were hoping for a steady result. Four consecutive months of contraction represent the longest run since the GFC. Caixin’s equivalent PMI preformed a little better, rising to 48.6 from 48.3, but still representing faster-than-official contraction.

Yet we must once again be mindful of Beijing’s attempts to shift China’s economy away from exports and towards consumption. The official service sector PMI came in at 53.6, up from 53.1. And the Chinese data appeared to have no effect on the Australian market yesterday, when in the past the response has often been substantial.

Around the grounds, Japan’s manufacturing PMI rose to 52.6 from 52.4, the eurozone rose to 52.8 from 52.3 and the UK slumped to 52.7 from 55.2. The most disturbing result came from the US, which saw a fall to 48.6 from 50.1.

That You Santa?

US economists had expected 50.5. It’s the first fall into contraction for US manufacturing since November 2012 and the lowest reading since June 2009, at the depths of the GFC. The last time the Fed raised rates when the US manufacturing sector was in contraction was in 1981, when inflation was 10%.

But ultimately this didn’t faze Wall Street last night. US investors had clearly made up their minds that on the First of December, they will buy US stocks as well as Australian stocks, with a preference for those that have been beaten down over the year. Such is the December theme, and one of the factors behind the famed Santa Rally.

The indices did suffer a rapid pullback from early strength when the PMI result was released, but it did not last long. Wall Street was in buying mode.

In contrast to the weak manufacturing data was last night’s consumer data. Wall Street continues to shake its head at the ongoing surge in US car sales, led by low petrol prices and low finance costs. Total sales for November were 18.2m, up from 17.2m a year ago. The big winner in the month was Toyota. No prizes for guessing the biggest loser (dak, dak, dak).

The weak manufacturing data did, nevertheless, spark a flight into US bonds for the first time in a while. Having fallen into a slumber of late, last night the US ten-year yield fell 6 basis points to 2.15%. Commentators were nevertheless quick to suggest this does not imply the US bond market has decided there may not now be a Fed rate hike this month. They have decided that the pace of subsequent hikes will be very, very slow.

Commodities

One would expect a combination of weak manufacturing data for both China and the US to be negative for base metal prices, but base metal prices have been pretty well thumped of late. Thus on the relief of the drop in the greenback overnight, prices rallied somewhat. Aluminium rose 2%, zinc rose 1.5% and copper, lead and nickel rose around 1%.

The trend is not good for the iron ore price. A US$1.20 fall overnight to US$41.60/t suggests a number with a three in front of it may well be on the cards.

The oils had another quiet session last night, as markets await the outcome of Friday’s OPEC meeting. West Texas is little changed at US$41.59/bbl and Brent is down US37c to US$44.18/bbl.

Gold is up US$3.70 at US$1068.60/oz.

Today

The SPI Overnight closed up 3 points.

Australia’s GDP result is out today as noted, while RBA governor Glenn Stevens will speak in Perth.

Wall Street will see private sector jobs tonight, ahead of Friday’s non-farm payrolls report.

Collins Foods ((CKF)) will report its interim result today, and Fletcher Building ((FBU)) will hold an investor day.
 

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(Readers should note that all commentary, observations, names and calculations are provided for informative and educational purposes only. Investors should always consult with their licensed investment advisor first, before making any decisions. All views expressed are the author's and not by association FNArena's - see disclaimer on the website)

All paying members at FNArena are being reminded they can set an email alert specifically for The Overnight Report. Go to Portfolio and Alerts in the Cockpit and tick the box in front of The Overnight Report. You will receive an email alert every time a new Overnight Report has been published on the website.

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article 3 months old

Next Week At A Glance

For a more comprehensive preview of next week's events, please refer to "The Monday Report", published each Monday morning. For all economic data release dates, ex-div dates and times and other relevant information, please refer to the FNArena Calendar.


By Greg Peel

The market has come to the belief the Fed is no longer “data dependent”, even if it claims to be, at least in terms of incremental monthly numbers. Maybe if the November US jobs report shocks to the downside, and/or includes a big downward revision to the October result, would doubts creep in. Otherwise, only a major exogenous shock will prevent the Fed raising next month, it appears.

There is nevertheless plenty of US data out next week for the Fed to ponder, all crammed into the first three days. It’s Thanksgiving week in the US, which means a full day’s trading on Monday and Tuesday, half a day on Wednesday, closed on Thursday and half a day on Friday – “Black Friday”, that is, the day America does its Christmas shopping and the P&Ls of Christmas-weighted retailers swing into the black for the first time in the year.  

Or so the story goes.

So Wall Street will be keeping a close eye on existing and new home sales, house prices, consumer confidence, durable goods, personal income & spending, the Chicago and Richmond Fed activity indices, and a revision of the first estimate of September quarter GDP, all in three days. By Wednesday afternoon the tumbleweeds will be rolling through the NYSE and only the skeletons will come out to play.

Monday is flash day next week, but now that Caixin has decided to no longer provide a flash estimate of its China PMIs, the excitement has waned somewhat. Japan, the eurozone and US will still flash, although Japan is closed on Monday.

Locally attention turns again to September quarter data ahead of our own GDP result the following week. We’ll see construction work done and private sector capex – the latter being particularly important to RBA policy considerations.

And the AGM season rolls on, although thankfully numbers begin to thin next week. There are a handful of stragglers booked in December.

Technology One ((TNE)) and Fisher & Paykal Healthcare ((FPH)) will provide earnings reports.
 

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article 3 months old

The Overnight Report: Softly Softly

By Greg Peel

The Dow closed down 4 points while the S&P lost 0.1% to 2081 and the Nasdaq closed flat.

Buy Australia

If the Fed decides to hesitate yet again in December it would be very ugly for global markets. Less than one month out from the next meeting, the world is baking in a Fed rate rise. But why is this a positive development?

It’s not about a strong US economy, as the US economy is far from strong. Keating would call it a rate rise the Fed has to have, just to have somewhere to cut from were it to become necessary down the track, and also to restore credibility in a central bank that has seem to have lost its rudder. And the “just get it over with” mantra from the markets is very robust.

Once it’s over with, attention then turns to the next Fed rate rise. While the minutes of the October meeting may have been hawkish in the sense a majority of FOMC members are now in the December hike camp, it was also more dovish on the wider picture as the Fed is even more emphatic that the tightening cycle to come will probably be the slowest ever seen in history.

That’s why the US dollar index is down 0.7%, to 98.97, over the past 24 hours. Forex markets have been pricing in a tightening cycle far more aggressive than the Fed is intending. And while a US rate hike means Australian stocks are less attractive to US investors on a narrower yield spread, a slower than expected subsequent tightening cycle means that first 25 basis points is neither here nor there. So if rates remain lower for longer and the US dollar is set for a correction, what do you buy?

How about a high-yield stock market in a safe jurisdiction offering the potential for a currency rebound on the back of a greenback correction.

Yesterday’s 2.1% jump for the ASX200 was indiscriminate. Every sector was up on relatively equal terms. Forget commodity prices, yesterday simply saw index buying – Buy Australia.

The Aussie dollar rose steadily at the same time, suggesting those buying stocks were acquiring the necessary local currency first. The Aussie’s rally continued through last night as the US dollar fell, taking the Battler up a full 1.3% over 24 hours to US$0.7196.

The ASX200 is up 5% in a mere three sessions. If you make 10% in a year on your portfolio you have a happy Christmas. Being Friday today, and given Wall Street was flat overnight, we’ll probably see some profits locked in. But was that a bloke in a red suit I saw down in Bridge Street watching the ticker yesterday?

Sun Rising

It was a session downunder in which no one was ever really going to care what the Bank of Japan did or didn’t do, except maybe the forex cowboys. The BoJ did nothing and surprised no one, given the market has now given away the idea of any tit-for-tat QE expansion from a central bank already expanded up to its eyeballs.

Having downgraded its economic growth and inflation expectations at its October meeting, and having since seen Japan fall into “technical” recession, the BoJ declared yesterday that the outlook for Japan in the December quarter is actually very rosy. Or cherry blossomy perhaps.

Never mind that Japan’s October trade data was very weak. Either way, the yen rallied last night as traders came to the conclusion there is simply not going to be any further easing in Japan. The rally played into the US dollar’s pullback.

Ill Health

US healthcare sector stocks were slammed last night on Wall Street. It is not an issue investors in Australian healthcare stocks – and there are many of those – should be concerned about, as the trigger is very much US-centric.

Major insurer and Dow component United Health last night suggested it might pull out of Obamacare. Now, I don’t pretend to fully understand Obamacare because US public health policy is so far removed from that we thank Gough for every day in Australia it might as well be on another planet. But I do understand that from the outset of the introduction of a policy which is as close to “universal health” as America is ever likely to get, it was assumed health insurers would greatly benefit on their bottom lines. But last night United Health issued a profit warning, and blamed the downgrade on lower than expected Obamacare-related earnings.

Hence last night the premium built into to the US healthcare sector started to unravel in a hurry, making the sector by far the worst performer on the day. The energy sector also had another weak session as the WTI price again traded below 40, albeit it has snuck back above that level once more. Otherwise, almost all other S&P500 sectors finished in the green last night to balance out for a flat overall result.

The best performer was utilities. In the face of an upcoming rate rise? Yes, because subsequent rate rises will be a long time coming.

There was actually a positive US data release last night as well, which, outside jobs, have been few and far between of late. After two months in negative territory the Philadelphia Fed activity index swung back into the positive (expansion) at plus 1.9 points.

Commodities

The weekly US inventory report released last night showed yet another big build in crude, and also a big build in natural gas in storage. West Texas dipped below the 40 mark once more but once more recovered, albeit expiry day for the December contract will have come into play. WTI is trading at US$40.49/bbl, down US40c, while Brent is steady at US$44.25/bbl.

The US natural gas price fell 3% to US$2.28/mmbtu.

Typically a 0.7% drop in the US dollar would be positive for metals prices, but keen buyers are thin on the ground in London at present. Base metals closed mixed on minimal moves last night.

After a brief respite iron ore continued its slide again, down US70c to US$45.10/t.

Gold is far more closely linked to currency moves, hence it’s up US$10.00 to US$1081.90/oz.

Today

The SPI overnight closed up 4 points.

This looks ambitious on a Friday after a 5% rally with some mixed commodity price moves overnight, but then the index does seem to be in a bit of a mood.

There are, unusually, no major economic data releases at home or abroad today.

There are still more AGMs to plough through locally nonetheless.

Rudi will appear on Sky Business Your Money, Your Call - Bonds tonight, 7-8pm.
 

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(Readers should note that all commentary, observations, names and calculations are provided for informative and educational purposes only. Investors should always consult with their licensed investment advisor first, before making any decisions. All views expressed are the author's and not by association FNArena's - see disclaimer on the website)

All paying members at FNArena are being reminded they can set an email alert specifically for The Overnight Report. Go to Portfolio and Alerts in the Cockpit and tick the box in front of The Overnight Report. You will receive an email alert every time a new Overnight Report has been published on the website.

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article 3 months old

The Overnight Report: Bring On December

By Greg Peel

The Dow rose 247 points or 1.4% while the S&P gained 1.6% to 2083 and the Nasdaq added 1.8%.

Put Options

The futures were right on the money in calling the local index down 37 points yesterday morning, based no doubt on falls in commodity prices overnight, as that’s pretty much where we were at from the bell. We then staggered through the morning but from midday, the buyers returned.

It would appear that yield is what they were after. The push towards a positive close was led by the banks, telco and utilities, all with gains of around 0.7-0.9%. Materials was the drag with a 1.5% drop following big falls in iron ore and base metal prices but energy managed to sneak into the green despite a pullback for oil prices.

The yield case was likely revisited following the last morning release of Australia’s September quarter wage price index. It rose 0.6% for the quarter to leave annual growth unchanged at 2.3% -- the lowest rate since data began being kept.

The numbers came in as economists had forecast and supported the RBA’s view that spare capacity in the labour market will continue to hold back wage growth and thus inflation for a while yet, even as the unemployment rate falls. While “lowest in history” seems significant, never in history have we seen the RBA’s cash rate so low or rates as low as they are across the globe, including zero in the US. Inflation is running at 1.5% locally, thus real wage growth remains positive at 0.8%.

The implication from the data is that while the minutes of the November RBA meeting, released this week, provided a cautiously upbeat assessment of the progress of Australia’s economic transition, thus ruling out a December rate cut, the board noted that the low inflation environment continued to provide “scope” for a rate cut if deemed necessary.

Were we to have another rate cut it would act as counter to a Fed rate hike for foreign investors, thus maintaining the value of local yield stocks. With the index buying we’ve seen this week, particularly on Tuesday, it is also likely foreign investors are eyeing off an Aussie near 70c now when not so long ago it was over the dollar. The Aussie is reflecting weakness in commodity prices and if one assumes commodity prices can’t fall by too much more, and that the Aussie will likely only fall into the high sixties from here at worst, then now is a good time to invest in Australia from offshore.

So locally, as I suggested yesterday, investors have a “put option” in the form of “scope” for the RBA to cut if it has to, while investing in the “moderate economic expansion” the RBA currently perceives. Foreign investors have a put option in the form of a currency that is at the lower end of its historic range.

No Choice

“Most participants” believed that conditions for beginning to raise interest rates “could well be met by the time of the next meeting”.

So said the minutes of the October Fed meeting, at which, it appears, the number of FOMC members now happy to go next month has shifted into majority. And since that meeting was held, the runaway October jobs numbers were released.

But for a lot of observers around the globe it’s now a case of the Fed hiking in December not because US economic data are positive, but because the central bank has come under enormous criticism for its hesitation and lack of decisiveness. The Fed should have pulled the trigger 18 months ago, many suggest. At least in June. And why not in September? Now it looks like they have simply backed themselves into a corner and have no choice but to get this rate rise out of the way.

Previously the Fed was worried a rate rise might spark volatility in markets. Now they are likely worried the opposite would be true. Yet aside from jobs, recent US data have been weak at best. As one commentator put it, if the cash rate was 3% and not zero, a very good case could be made right now for a rate cut. But the Fed can’t cut, because the rate is zero, It has missed the opportunity to provide itself with the sort of leverage the RBA is currently enjoying. Therefore December is likely to bring a rate hike simply for the sake of having a rate hike.

It is never quite clear which way Wall Street is going to run on the cut/no cut argument, given the response seems to vary. But a 250-point Dow rally last night with no other real incentive (the day’s economic data release was an 11% drop in housing starts) suggests Wall Street is looking forward to getting it all over and done with.

There was little response in forex and bond markets nonetheless. The US dollar index is steady at 99.62 and the US ten-year yield rose a point last night to 2.27%. Both markets have already moved to a position which suggests a December rate hike is now baked in. It is the stock market that remains fickle.

Commodities

The Fed minutes had not been released when the LME closed last night, so that response will have to wait till tonight. But weak US housing starts were matched by data yesterday showing an easing of house price growth in China, and talk at an industry gathering in Shanghai was of copper prices remaining weak for at least another two years.

Copper was down 1.5% last night, as was zinc, and nickel fell 1%.

Iron ore was thankfully unchanged at US$45.80/t following Tuesday night’s big fall.

West Texas crude had another look at the 39 mark last night, briefly, before recovering to be up US16c at US$40.89/bbl. Brent is up US75c at US$44.32/bbl on the new January delivery contract.

As the greenback is steady, so too is gold at US$1071.90/oz.

The Aussie is off 0.2% at US$0.7107.

Today

The SPI Overnight is up 58 points or 1.1%. Did someone mention Santa?

The Bank of Japan will hold a policy meeting today.The BoJ seems to be accomplished in changing monetary policy just when no one was expecting it to and then not changing policy when everyone expects it will. Markets had thought there was a chance the BoJ would extend QE to counter the ECB and Chinese stimulus at both of the past two meetings, with no result. Thus no one is now expecting any change today, but in the wake of Japan’s “recession” GDP result, who knows?

On the local market the AGM bandwagon rolls – today’s highlight being BHP Billiton ((BHP)) -- while James Hardie ((JHX)) released its interim result (profit warning) and Stockland ((SGP)) hosts an investor day.

Rudi will make his weekly appearance on Sky Business's Lunch Money, noon-1pm, and then again between 7-8pm on Switzer TV.
 

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(Readers should note that all commentary, observations, names and calculations are provided for informative and educational purposes only. Investors should always consult with their licensed investment advisor first, before making any decisions. All views expressed are the author's and not by association FNArena's - see disclaimer on the website)

All paying members at FNArena are being reminded they can set an email alert specifically for The Overnight Report. Go to Portfolio and Alerts in the Cockpit and tick the box in front of The Overnight Report. You will receive an email alert every time a new Overnight Report has been published on the website.

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article 3 months old

The Overnight Report: Aujourd’hui Je Suis Un Parisien

By Greg Peel

The Dow rose 237 points or 1.4% while the S&P gained 1.5% to 2053 and the Nasdaq added 1.2%.

Resilience

Wall Street was accelerating to the downside when it closed on Friday night and commodity prices were all again mostly lower in that session, ensuring the local market would be under pressure yesterday morning. The Paris attacks added an additional level of expected downside.

But the world, it seems, has become inured to terrorist attacks and no longer reflects global fear through stock market sell-offs. History shows that such terror events initially prompt market sell-offs before recoveries that are swift and solid. This time around the world has decided the initial sell-off is the unnecessary part.

The ASX200 plunged 72 points from the open yesterday. The SPI futures had closed down 37 points on Saturday morning so the balance could be considered the Paris effect, but the index very quickly rebounded.

On a technical basis, the breach of 5000 brought in the buyers at least to some extent, with almost all sectors ultimately finishing in the red. The industrials sector (-1.3%) was one of the hardest hit, as therein lies all manner of companies connected to overseas travel and tourism. But a large part of the rally back to a less ominous close can be attributed to energy (+1.6%). On expectation the war against IS will intensify in the Middle East, buyers were no doubt anticipating a bounce in oil prices.

The index closed right on the pivot point of 5000, waiting to see what might transpire overnight.

Meanwhile Japan released its September quarter GDP result yesterday which showed a 0.8% year on year contraction, confirming that Japan is yet again in technical recession. The June quarter saw 0.7% contraction. While the result is another thorn in the side of Abenomics, and underscores just how significantly Japan’s earlier sales tax increase has hit an economy 60% reliant on consumption, economists are confident the December quarter will provide a bounce-back given improvement in more recent data releases.

Defiance

Tourism represents some 7% of French GDP, and already airlines and travel companies are offering refunds to those having planned trips to France. Fashion and high-end retail are also a major beneficiary of tourists to Paris. The French stock market plunged on the open last night but very quickly recovered to a flat close. Ditto the German market, while the London market fell briefly before rallying 0.5%.

Wall Street never blinked. It was a stumbling start, but buyers came in on a steady trend all session to a solid close. Commentators were surprised, expecting at least some fearful reaction in the country most likely to see terrorist events. The response was made even more surprising by the two steep falls on Thursday and Friday and Friday’s very weak close, which suggested the US indices could be in for more selling this week.

Wall Street also shrugged off another weak reading for manufacturing in the New York Fed region, with the Empire State index coming in at minus 10.7 from minus 11.4 last month when economists had forecast improvement to minus 6.5.

Traders also ignored a stronger US dollar, which is up 0.5% on its index to 99.39 on a typical safe haven trade. The strong greenback is a major factor in US September quarter earnings showing negative growth for the second consecutive quarter and negative revenue growth for the third. The stronger dollar also impacts on commodity prices, and for the US the most important commodity is oil.

Trouble in the Middle East? Oil would typically rally. But then IS has been in operation for some time now and oil prices have been retesting lows. Thus oil prices actually fell on the open on Nymex last night.

Then news came through US air strikes had begun targeting IS oil truck convoys. West Texas crude turned around on the news and rallied strongly, supporting stock indices.

Commodities

West Texas is up US$1.29 or 3.2% at US$42.06/bbl and Brent is up US$1.26 or 2.9% at US$44.87/bbl.

In earlier times one would expect a rally in gold as the haven against all things geopolitical. Those days are gone however, and if anything gold tends to be sold off at times of crisis in order to cover margin calls on plummeting stock positions. But stocks did not plummet and while gold did see some buying earlier on, it is currently flat at US$1081.90/oz.

The stronger greenback provided a headwind, as it did for base metal prices.

Sentiment is already at a low ebb on the LME. The Paris attacks, the stronger greenback, the Japanese recession and a weaker than expected reading on US manufacturing did nothing to brighten the mood last night. Copper was slammed, down 2.2%. Zinc fell 2%, aluminium and nickel fell 1.5% and lead and tin fell 1%.

Iron ore fell US10c to US$47.30/t.

The Aussie is down 0.5% to match the greenback’s rally, at US$0.7093.

Today

The SPI Overnight is up 66 points or 1.3%. We shall overcome.

The minutes of the November RBA meeting are out this morning and economists will be looking for clues, but the meeting pre-dated the astonishing October jobs report.

The US October CPI is out tonight, playing into Fed speculation.

AusNet Services ((AST)) will report interim earnings today while a large number of AGMs will take place across the country, including that of Commonwealth Bank ((CBA)).
 

All overnight and intraday prices, average prices, currency conversions and charts for stock indices, currencies, commodities, bonds, VIX and more available in the FNArena Cockpit.  Click here. (Subscribers can access prices in the Cockpit.)

(Readers should note that all commentary, observations, names and calculations are provided for informative and educational purposes only. Investors should always consult with their licensed investment advisor first, before making any decisions. All views expressed are the author's and not by association FNArena's - see disclaimer on the website)

All paying members at FNArena are being reminded they can set an email alert specifically for The Overnight Report. Go to Portfolio and Alerts in the Cockpit and tick the box in front of The Overnight Report. You will receive an email alert every time a new Overnight Report has been published on the website.

Find out why FNArena subscribers like the service so much: "Your Feedback (Thank You)" - Warning this story contains unashamedly positive feedback on the service provided. www.fnarena.com

article 3 months old

Next Week At A Glance

For a more comprehensive preview of next week's events, please refer to "The Monday Report", published each Monday morning. For all economic data release dates, ex-div dates and times and other relevant information, please refer to the FNArena Calendar.


By Greg Peel

As the Fed leaves the entire would uncertain and frustrated over monetary policy direction, or lack thereof, the ECB’s intentions are less vague. Tonight sees the release of the first estimate of eurozone September quarter GDP.

The Bank of Japan has simply remained silent on the subject of monetary policy when many have been expecting some recourse to both ECB QE and Chinese stimulus measures. Monday sees the release of Japan’s GDP.

The BoJ will hold a policy meeting on Thursday.

If the Fed is still waiting for last minute US data to provide a guide, next week sees housing sentiment and starts, the CPI, industrial production, leading economic indicators and the Empire State and Philly Fed activity indices.

Wednesday night see the release of the minutes of the October Fed meeting, which will undoubtedly provide no further clues.

The minutes of the October RBA meeting are out on Tuesday and further clues will also be sought, this time in the other direction.

Just when you thought there couldn’t possibly be any more local corporate AGMs, the next two weeks bring a late barrage.

Orica ((ORI)) and James Hardie ((JHX)) will report earnings next week.
 

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article 3 months old

Next Week At A Glance

For a more comprehensive preview of next week's events, please refer to "The Monday Report", published each Monday morning. For all economic data release dates, ex-div dates and times and other relevant information, please refer to the FNArena Calendar.


By Greg Peel

Summer time ends in the US this weekend so as of Tuesday morning locally, the NYSE will close at 8am Sydney time, as will the SPI Overnight session.

On Sunday Beijing will release official October manufacturing and service sector PMIs ahead of the usual first trading day of the month manufacturing releases from Australia, Japan, the eurozone, UK and US, and Caixin’s independent Chinese number.

Wednesday brings a repeat for service sector PMIs.

Australia will also see building approvals, retail sales and trade numbers next week. Tuesday sees the Rate That Stops A Nation along with some horse race or other, which ushers in the market’s Silly Season. From here on it’s all about Christmas parties, long lunches and, hopefully, a Santa rally.

The RBA will also issue its December quarter Statement on Monetary Policy later in the week.

Japan will be closed on Tuesday for the Melbourne Cup. Or maybe for Culture Day.

US data releases next week include construction spending, factory orders, vehicle and chain store sales, trade and productivity. Wednesday sees the ADP private sector jobs report and Friday the all-important October non-farm payrolls numbers.

On the local stock front, the resource sector’s quarterly production report season is now over but the AGM season rolls on with gusto, albeit the volume will begin to reduce.

Westpac ((WBC)) will report full-year earnings on Monday and Commonwealth Bank ((CBA)) will provide a quarterly update on Thursday. CSR ((CSR)) will release its interim result on Wednesday.
 

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article 3 months old

Next Week At A Glance

For a more comprehensive preview of next week's events, please refer to "The Monday Report", published each Monday morning. For all economic data release dates, ex-div dates and times and other relevant information, please refer to the FNArena Calendar.


By Greg Peel

US jobs report tonight, which could determine whether the Fed lifts off in December or waits until next year. In theory the end of this month is also a possibility, but that is being given a very low probability by Wall Street.

Before the December meeting there'll be two more jobs reports.

Monday is services PMI day for all those countries who, unlike China, does not release both PMIs on the same day, including Australia and the US.

The US will also see trade, consumer credit and chain store sales data next week and the minutes of the last Fed meeting will be released on Thursday.

China will be closed on Monday through Wednesday.

The Bank of Japan will hold a policy meeting on Wednesday and the Bank of England on Thursday.

The RBA will hold a policy meeting on Tuesday. The week will see ANZ jobs ads, the trade balance and our own jobs numbers.

Monday is a public holiday in NSW, the ACT, Queensland and South Australia. The ASX is open.

On Sunday night clocks go forward in relevant states, meaning that from Tuesday morning the NYSE will close at 7am Sydney time.
 

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article 3 months old

Next Week At A Glance

For a more comprehensive preview of next week's events, please refer to "The Monday Report", published each Monday morning. For all economic data release dates, ex-div dates and times and other relevant information, please refer to the FNArena Calendar.


By Greg Peel

Well I would like to have been able to say today ushers in a whole new world but I can't, so it's back to the same old game.

Wall Street has to get through quadruple witching expiry tonight after a volatile period and Greece goes to the polls on Sunday. Wouldn't it be fun to talk about nothing other than Greece and the Fed for the next three months?

On Wednesday Caixin will provide a flash estimate of its China manufacturing PMI for September, offering up some more potential volatility. Japan, the eurozone and the US will also provide estimates.

Japan will be closed from Monday through Wednesday.

The Fed's endless data-dependence will be fuelled by existing and new home sales, house prices, the Richmond Fed regional and Chicago Fed national indices, durable goods, consumer sentiment and the second revision of June quarter GDP.

Australia's week is largely devoid of data.

On the local stock front, there remains a trickle of ex-divs to get through, Telstra ((TLS)) will begin holding shareholder meetings across the country, TPG Telecom ((TPM)), Nufarm ((NUF)) and Brickworks ((BKW)) post FY15 results, and the what will soon be a flood of AGMs kicks off next week, with Suncorp ((SUN)) among the early crowd.
 

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