Economic data of the day (Singapore Time)
- 1400: EUR – Germany PPI MoM (Exp. -0.1%, Prev. 0.0%), YoY (Exp. -1.4%, Prev. -1.3%)
Overnight News
- German Chancellor Angela Merkel disregards any Greek debt “haircut”. After a heated debate, the Greek parliament approved the bill for the bailout
- University of Michigan Sentiment index came lower than expected at 93.3 (96.0 was expected)
- Bank of England governor Mark Carney signals a rate hike at the end of the year “The need for bank rate to rise reflects the momentum in the economy and a gradual firming of underlying inflationary pressures. A firming that will become more apparent as the effects of past commodity price falls drop out of the annual inflation rate around the end of the year
Foreign exchange
The main theme of a strong USD continued on Friday. EUR trades at the low since May. AUD has now a strong resistance at 0.7500 and we should expect sellers on any small rally. DXY has broken the previous high in May and the next target is now 100.
Foreign exchange volatility
Note: The change of volatilities are taken from Thursday close. The volatility continues to drop as the market is already long gamma and the trend of a stronger USD is stronger
Rates
The Euro Quantitative Easing trade is back on track once again with the Bunds trading now 20 bps lower since the high of last week
Commodities
Gold is trading at five-year lows, based on Chinese disinterest. Photo: iStock
Equities
UK stocks fell from highest level in almost a month, led by declines in mining and oil after the Bank of England indicated a rate rise.
In the US, the Nasdaq closed at a record level on Friday powered by Google’s blockbuster earnings results. Google (NASDAQ:GOOGL) shares were up 16%; while Etsy Inc also rocketed 31% after Google named the ecommerce company as one of its developers for new Google traffic boosting algorithms. The S&P was less robust led by losses in energy, material and utilities sector.
Market watch
Google shares may continue its climb this week off of speculation in the market of a potential share buy-back coming over the next three years.
-- Edited By Adam Courtenay
Singapore Morning Report is compiled by the APAC Sales Trading Team, Saxo Capital Markets, Singapore. Follow us on @SaxoStrats on Twitter (NYSE:TWTR).
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