Daily Market Update 23 July 2013 - Little to focus on, except a baby boy

Daily Market Update 23 July 2013 - Little to focus on, except a baby boy

More disappointing news on the US housing market overnight with sales of existing homes falling by 1.2% to an annual pace of 5.08m in June. The result was below the 0.6% increase that had been expected by the markets and came on the back of a downwardly-revised 3.4% rise in May. While sales numbers disappointed, there was some good news on the valuations front with the average median house price rising by 13.5% on year to $214,200, the largest percentage increase seen since June 2008. That along with higher mortgage rates and ongoing tight supply, just 5.2 months worth of stock is available compared to 5.0 months in May, all contributing to the headline data miss.

Euro area debt-to-GDP continued to climb during Q1 2013 with Eurostat reporting an increase to 92.2%. The figure was higher than the 90.6% reading recorded in Q4 2012 with the largest increases coming from Ireland, Belgium and Spain. In overall terms, Greece, Italy, Portugal, Ireland and Belgium carry the greatest debt burdens with all five registering ratios in excess of 100%.

Taiwan export orders fell unexpectedly in the year to June with a decrease of 3.5% reported. The result was well below the 0.5% rise expected by the markets and came on the back of an equally uninspiring 0.4% decline in May. A 12.8% plunge in orders from Japan, along with a 1.7% decline from China, were more than enough to offset a 2.2% increase from the US.

The Day Ahead (All times AEST)

The ASX 200 looks set to continue its push above the 5000 point level this morning with SPI futures pointing to a rise of 14pts on the open. Given the flat close on Wall Street and a lack of market-moving data during the Asian session, it’s unlikely that we’ll see anything too spectacular today with investors likely to bide their time until the release of Q1 CPI, along with the ‘flash’ manufacturing PMI number from China, tomorrow. While stranger things have happened, gains today should be led by those in the materials sector.

Riding on a wave of USD weakness since markets reopened on Monday, the AUDUSD has been propelled higher overnight as a combination of short-squeezing, stop-loss chasing and higher metals prices saw the pair move as high as .9269 before easing into the NY close. Given the trend is clearly higher at present, it appears likely that we’ll see a test of the 93c level before too long, perhaps even today given a lack of major data releases, although the pair is unlikely to advance too much further from here given many are looking to use any significant ‘pop’ to sell into above this level. On the downside support is found at .9234 and again below .9215.

Data releases this evening include monthly house prices and Richmond Fed business index in the States, Canadian retail sales, Eurozone consumer confidence along with the French business climate index.

Apple, AT&T and Unisys headline US Q2 earnings season this evening.


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