The market is down 20 points. The Dow Jones finished up seven. It was up 57 at best and down eight at worst.

The S&P 500 closed up two to 1655.

Gold price down another $17 to $1373 on suggestions that the US Congressional vote to take military action is not a foregone conclusion with a large number of Democrats undecided.

More strong economic numbers in the US — factory orders ahead of expectations, ADP Employment number was in line with expectations (it is a private sector pre-cursor to tonight’s official jobs numbers), the ISM Services index was stronger than expected (best since Jan 2008) and weekly jobless numbers were better than expected.

Central bank meetings from the ECB and Bank of England show no signs of easing their bond buying programs or tightening policy anytime soon and helped all European markets higher. Mario Draghi (ECB President) also hinted at dropping rates even further and utilising the LTRO program if necessary (they haven’t actually used it yet).

Bonds fell for the 6th session on the strong economic data — the 10 year bond yield up 10 basis points to 2.997% and up 30 basis points in a week — the 30 year rate also up to 3.885% — both are at over two year highs now which threatens the housing market recovery and may delay the tapering decision.

The A$ has softened overnight to 91.26c having hit a high of 91.89c — the US dollar index is up for the 6th day in seven and close to a six week high and above its 50 and 100 day moving average. The A$ is down from a recent high of $92.34c and a low of 88.48c on 5th August.

BHP was down 0.65% in the US overnight. The stock closed in the US down 9c on the close here yesterday. RIO down 0.23% in the US.

The oil price up 1.06%.

European markets mostly up. Small gains on the back of dovish central bank meetings.

The Japanese market was up 0.08% yesterday. The Bank of Japan raised its economic assessment noting a pick up in inflation and employment. The Chinese market was down 0.24% yesterday.

The iron ore price was down 90c to $137.10 overnight.

Metals mixed — No big movements.

In Europe tonight — German industrial production and trade numbers. UK consumer inflation expectations, manufacturing production, trade balance, and NIESR GDP Estimate.

 US economic numbers due out tonight:

  • Nonfarm Payrolls: consensus 177K, prior 162K
  • Continuing Claims: consensus 180K, prior 161K
  • Nonfarm Private Payrolls: 7.5%, consensus 7.4%, prior 7.4%. 

RESULTS & STORIES

  • The S&P ASX index re-balance has been announced.
  • Nine Entertainment is on a roadshow pending its IPO. Institutional feedback after the disappointing IPO of Myer (which halved) is that this time they want private equity to retain a large stake.
  • Newcrest (NCM) cleared of giving brokers selective briefings by the ex-chairman of the ASX Maurice Newman but the report has its limitations and an ASIC investigation will decide the issue. It’s hardly a share price factor. What it might lead to are some legislative changes regarding disclosure.
  • According to global PMI figures Australia’s manufacturing activity ranks among the lowest in the world. The AIG Performance of Manufacturing Index marked its 26th consecutive month of contraction in August coming in at 46.4. The number is worse than Greece’s PMI of 48.7. But the good news is that this figure is rising. It rose 4.4 points from July’s figure. The fall in the Aussie dollar is making businesses more competitive against imports.
  • Leighton Holdings (LEI) — Subsidary Thiess has won a $1.8 billion contract for work on the massive Queensland Curtis Island liquefied natural gas (LNG) project.
  • Miclyn Express Offshore (MIO) — Has received a conditional proposal from major shareholders.
  • The AIG / HIA Performance of Construction Index (PCI) fell 0.4 points to 43.7 in August.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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