Daily Market Update 15 November 2013 - Never fear, Yellenomics is here!

Daily Market Update 15 November 2013 - Never fear, Yellenomics is here!

A largely non-eventful Senate Banking Committee confirmation hearing from Janet Yellen overnight with the FOMC Chairperson in waiting managing to avoid any potential conflicts that may have jeopardised her nomination. If you’d like to watch her testimony in full, please click here.


US initial claims fell fractionally last week with a decline to 339k reported. While 2k fewer than the upwardly-revised 341k pace of the previous corresponding week, the figure was below expectations for a decline to 330k.


The US trade deficit expanded unexpectedly in September with an increase to $41.8b recorded. The figure was above both the $38.7b figure of August and expectations for an increase to $39.0b. 


US productivity expanded for a second-consecutive quarter in Q3 with an annualised rate of 1.9% reported. While above the downwardly-revised 1.8% pace seen in Q2, the figure was below expectations for an increase of 2.2%. Overall output increased by 3.7% for the quarter, up from 3.3% prior, while total employee hours worked rose by a smaller 1.7%.  On the labour front, total costs fell sharply, declining 0.6% after rising 0.5% in Q2.


Canada new home prices held steady in September with nil change recorded over the month. The figure was below expectations for an increase of 0.1% and left the yearly rise 0.1% lower than August at 1.6%. Interestingly, September was the first time since March 2011 that new home prices had not increased.  


Canada’s trade deficit narrowed in September with a decrease to $440m reported. The figure was below both the downwardly-revised $1.09b deficit of August and expectations for a decrease to $1b.


Eurozone economic growth slowed to a crawl in the September quarter with a rise of 0.1% reported. While down on the 0.3% pace recorded in the three months to June, the result was in line with economic forecasts and left the annual rate of contraction slightly stronger at -0.4%. Some of the more-notable national performances can be found below.

- Germany: +0.3% QQ (+0.3% forecast), +1.1% YY

- France: -0.1% QQ (0.0% forecast), +0.2% YY

- Italy: -0.1% QQ (-0.1% forecast), -1.9% YY

- Greece: -3.0% YY (previous -3.7%)


French non-farm payrolls continued to slide in Q3 with a fall of 0.1% reported. The figure was in line with expectations with declines across the industrial and construction sectors partly offset by flat growth in services. In total 17k jobs were lost during the quarter with the figure excluding temporary work rising to 21.8k. As you would expect with soft labour market conditions, wages growth also fell with an increase of 0.2% reported. The figure was half that seen in the three months to June and left the annualised pace of growth at just 1.7%.


Making it three nights in a row of dovish prints, French CPI continued to slide in October with a decline of 0.1% recorded. While above the -0.2% fall of September, the reading was in line with expectations and left the annualised rate of inflation at a 47-month low of 0.7%.


Greek unemployment held steady at 27.3% in August. While in line with the downwardly-revised 27.3% rate of July, the unemployment rate still sits some 20% above the pre-GFC low of 7.3% struck in May 2008.


UK retail sales fell unexpectedly in October with a decline of 0.7% reported. The reading was well below both the upwardly-revised 0.8% increase of September and expectations for flat growth for the month and left the annualised rate sharply lower at 1.8%. Excluding auto-related sales, items tend to skew the data, the news was little better with core sales slipping 0.6% with the year-on-year rate slowing to 2.3%


Matching the rise in consumer prices seen yesterday, Indian wholesale price inflation rose strongly in October with an annualised increase of 7.0% reported. The figure was above both the 6.46% rate of September and expectations for an increase to 6.95%.


The Day Ahead (All times AEDT)

Rewind and press play. That sums up the price action we’ll see on the ASX 200 today with the market likely to mirror the performance of Thursday on the back of further gains on Wall St. While there’s every likelihood that we’ll finish in positive territory, should we see the Aussie Dollar come under renewed pressure as was the case yesterday, expect to see the index give back some early gains into the closing bell.


The AUDUSD fell heavily overnight before retracing most its early losses into the close with the pair currently fetching .9321. With no data whatsoever released during the Asian session, we expect the pair will continue the pattern witnessed yesterday – whatever the USDJPY does the AUDUSD will do the opposite. Support is found at .9313, .9280 and at .9269 with resistance kicking in at .9328, .9387 and again at .9401.


A US-centric data calendar arrives this evening with existing home sales, Empire State manufacturing index, industrial production, import prices along with wholesale sales and inventories all scheduled for release. Elsewhere we’ll also receive Eurozone inflation, an important release given the recent rate cut from the ECB, Canadian manufacturing sales along with trade and current account figures from Italy.


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