Overview: The only news of note thus far has been the Chinese HSBC Mfg PMI (below expectations), which hit European risk appetite going forward, and the just out better than expected US weekly first time jobless claims. Too early to say if it will have impact. Light volume before another holiday weekend, Little meaning
The only remaining scheduled calendar reports of note come Thursday: China HSBC Mfg PMI, US first time jobless claims, pending home sales, for the few traders still on hand.
STOCKS: US: Up – Stocks closed higher despite a late session slide on light news and volume.
With such quiet trade, it’s time to look ahead to 2011. See our special report: Summary 2011 Outlook And Selections For Prosperity And Protection. For our outlook on the week see: Key Market Movers Dec 27 - 31: Will Low Liquidity, Stimulus, Render News Irrelevant Yet Again?
US Bonds: Up- The benchmark 10-year Note gained more than a point so that its yield fell from 3.4810% to 3.34%.
Treasuries rallied strongly Wednesday after Tuesday’s plunge (which was in response to a poor 5-year Note auction) in reaction to better results from an auction of 7-year Notes. The auction attracted $82.9 bln in demand, with the bid-to-cover ratio at 2.86. The indirect bidder participation rate hit 64.2%. All of these indicators were healthier than those of the prior 5-year Note sale.
Asia Stock Outlook: Up –Most major Asian stock markets closed higher for the second straight day after 2 days of declines following news of China’s rate hike and rare earth element export cuts. The move up came despite weak Chinese data (HSBC’s Mfg PMI) that hinted at possible slowing growth. The big outlier was the Nikkei, which closed down over 1%. Shanghai and the Hang Seng were modestly higher, as were most other indices. Karachi (Pakistan) was the strongest, up over 1%.
European Stock Outlook: Down – Virtually all major European bourses down over 0.50% on light volume after Chinese data hinted of slowing growth.
Commodities Outlook Wednesday To Midday GMT Thursday:
Gold, Silver, Platinum, Copper: Up: All higher yesterday and continuing higher over the past 24 hours.
Energy: Down – Futures for crude, and other energy commodities down except for natgas which continues its 5 straight day of increases. Crude down to below $91, which has proven to be resistance since October of 2008.
Grains & Softs: All down modestly over the past 24 hours except for coffee, which is slightly higher.
FOREX Daily Outlook Wednesday To Midday GMT Thursday: No clear bias to risk or safety, no news behind today’s moves. Strongest over the past 24 hours: NZD, EUR, CHF in that order. Weakest over the past 24 hours: GBP, USD, CAD.
US Dollar Daily Outlook: Down vs. all except up vs. the GBP. First time jobless claims came out better than expected. If Chicago PMI and pending home sales can do the same the USD might see a boost in the US session.
Euro Daily Outlook: Up vs. all except down vs. the NZD over the past 24 hours, in sharp reversal to its having been the weakest from Midday GMT Tuesday-Wednesday.
Yen Daily Outlook: Up vs. the USD, GBP, AUD, CAD, down vs. the EUR, CHF
British Pound Daily Outlook: Down vs. all as it remains among the weakest fx of the past weeks.
Australian Dollar Daily Outlook: Up vs. the USD, GBP, CAD, down vs. the JPY, EUR, CHF, NZD
New Zealand Dollar Daily Outlook: Up vs. all for the second straight day.
Canadian Dollar Daily Outlook: Up vs. the USD, GBP, down vs. all others
Swiss Franc Daily Outlook: Up vs. all except down vs. the NZD, EUR.
DISCLOSURE & DISCLAIMER: AUTHOR SHORT EUR FOR PERSONAL PORTFOLIO, THE ABOVE IS FOR INFORMATIONAL PURPOSES ONLY AND NOT TO BE CONSTRUED AS SPECIFIC TRADING ADVICE. RESPONSIBILITY FOR TRADE DECISIONS IS SOLELY WITH THE READER