Daily Market Update 25 September 2013 - Groundhog Day repeat likely in Asia
US consumer confidence fell more-than-expected in September with the Conference Board index sliding to 79.7. The reading was below the upwardly-revised 81.8 figure of June and expectations for a decrease to 79.9 and was the lowest level seen since May 2013.
US metropolitan house prices rose at a slower rate than expected during July with the CaseShiller house price index increasing by 0.6%. While below expectations for a rise of 0.8%, the figure left the year-on-year increase at 12.4%, the highest level seen since February 2006.
Manufacturing activity across the Richmond Fed district held steady in September with their regional index falling to 0. The reading was well below the +14 figure seen in August with slower order growth, coupled with sharp falls in employee numbers, the average workweek and order backlogs, behind the surprisingly-weak result.
Having fallen heavily in June, Canadian retail sales bounced strongly in July with an increase of 0.6% reported. While matching market expectations, the result completely offset the identically-sized 0.6% fall of June. Making the headline figure even stronger, excluding auto sales, a lumpy item that tends to skew the data, sales rose by 1%, well ahead of expectations for an increase of 0.6%.
German business confidence rose fractionally during September with the IFO business climate index coming in at 107.7. While marginally above the upwardly-revised 107.6 reading of June, the result trailed estimates for an increase to 108.2 with a surprise drop in current conditions, down to 111.4 from 112 in August, partly offsetting a rise in expectations to 104.2.
Italy’s non-EU trade balance remained in surplus in August with a figure of €559m reported. The result was an improvement on the €903m deficit recorded in the same month last year but was below the €2.8b surplus of July.
The Day Ahead (All times AEST)
The ASX 200 look set to start today’s session marginally in the red with SPI futures pointing to a fall of 3pts on the open. While there may be a reaction to the RBA’s financial stability review when is released at 11.30am, particularly if hints at concerns surrounding recent developments in the existing housing market, given we have no data to focus on, holiday-thinned volumes and mixed commodity prices, it wouldn’t surprise to see a repeat of yesterday’s market performance arrive today. If anything, as is usually the case during these type of sessions, expect the index to closely mirror the movements of the Shanghai Composite when it opens at 11.30am.
A poor night for the AUDUSD with the pair slipping to as low as .9365 before bouncing modestly into the close. As is the case with equities, while there may be a reaction to the RBA’s financial stability review depending upon its content, with no major data scheduled and light volumes likely to persist, range trading is again favoured over the course of the Asian session. Support is found at .9385 and the overnight low of .9365 with resistance kicking in at .9400-10 and above .9450.
The RBA release their half-yearly Financial Stability Review at 11.30am.
New Zealand trade figures for August will be released this morning at 8.45am.
Data releases this evening include durable goods orders, new home sales and MBA mortgage market index from the US, consumer confidence figures from Germany and Italy, French business confidence, UK retail trade, Spanish producer prices along with Taiwan export orders. On the Fed front, William Dudley will speak from New York.