Daily Market Update 29 April 2014 - A repeat of yesterday likely

Daily Market Update 29 April 2014 - A repeat of yesterday likely

Overnight the United States imposed further sanctions on Russia due to ‘continued illegal intervention’ in Ukraine with 7 individuals and 17 firms added to the initial list announced earlier in the month. To read the full statement from the White House, click here<http://www.whitehouse.gov/the-press-office/2014/04/28/statement-press-secretary-ukraine>.


US pending home sales rose for the first time in nine months in March with an increase of 3.4% recorded<http://www.realtor.org/news-releases/2014/04/pending-home-sales-increase-in-march>. The reading was higher than the 0.5% fall recorded in February, revised up from -0.8%, and expectations for an increase of 1% with the gain the largest month-on-month expansion seen since May 2011. Despite the sharp improvement, total turnover still remains some 7.4% below the same levels of a year earlier. In total 3 of 4 regions saw gains during the month, led by a 5.7% jump in the west, with the Midwest the laggard with a decline of 0.8% recorded.


Manufacturing activity across Texas and surrounds accelerated sharply in April with the Dallas Fed manufacturing index<http://www.dallasfed.org/microsites/research/surveys/tmos/2014/1404/tmos1404.pdf> rising to 11.7. The reading was well above both the 4.9 figure of March and expectations for an increase to 6 with all bar one survey component improving over the month. Showing that activity levels may well improve from here, new orders, a lead indicator for future activity, rose to 21.3, the highest level seen since April 2010.


German import price deflation quickened in March with a decline of 0.6% reported<https://www.destatis.de/EN/PressServices/Press/pr/2014/04/PE14_148_614.html;jsessionid=56ADA9601D251D58F0156A193260D45D.cae4>. The reading was well below expectations for a decline of 0.1%, subsequently the same figure recorded in February, and left the year-on-year rate at -3.3%, a smidgen away from the sharpest annual contraction seen since November 2009.


Italian consumer confidence continued to surge in April with ISTAT reporting<http://www.istat.it/en/archive/119979> an increase to 105.4. The figure was well above both the 101.9 reading of March and expectations for a decline to 101.2 and left the index at the highest level seen since January 2010.


The Day Ahead (All times AEST)


The ASX 200 looks set to add to yesterday’s gains today with SPI futures pointing to a rise of 21pts on the open. As was the case yesterday, it’ll likely be a tale of two stories today with buying in financials before ANZ’s H1 profit announcement on Thursday likely to be partly offset by declines in the materials sector following sharp falls in iron ore and base metals overnight.


A poor session for the AUDUSD overnight with the pair falling nearly three-quarters of a cent to .9244 before rebounding modestly into the close. Despite the poor price action in both the currency and commodity markets overnight, as has been the case so often since early February this year, it’s likely that Asia will ‘buy the dip’ over the course of today’s trading session. Support is located at the overnight low of .9244, .9223 and again at .9206 with resistance layered at .9261, .9270, .9280 and above .9300.


Regional data out today includes New Zealand trade figures for March along with South Korean current account.


Data releases this evening include consumer confidence figures from the US, Eurozone, Germany and France, CaseShiller house price index from the States, Eurozone M3 growth, UK Q1 GDP, German CPI, Spanish unemployment and Italian business confidence.


Ebay and Merck headline the US Q1 earnings calendar this evening.


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