In a market wrap, analysts at ANZ New Zealand Bank noted that strong results from Twitter and Microsoft contributed to a bounce in US equities, with the Dow Jones up 1.6% and S&P 500 1.6% higher at time of writing.
Key Quotes:
“European bourses also had a better day, with the FTSE100 up 0.6%, the DAX up 1.0%, and the CAC 40 rising 1.6%.
Italian government bonds recovered somewhat, with yields on 10-year BTPs down 11bp.
The improvement in risk appetite saw 10-year UST yields 3bp higher.
Currency markets remain unconvinced on Brexit progress, with the sterling under selling pressure.
The AUD was one of the better performers overnight. Oil prices were up 0.5%.”
As for data, the analysts noted that US core durable goods orders disappointed, falling 0.1% m/m in September, while the headline measure rose 0.8%. “These numbers suggest investment is not taking off, even with the apparent tailwind from tax cuts and dollar repatriation. This indicates that the boost to GDP growth from the fiscal stimulus could be fairly transitory. “
“Meanwhile, the goods trade deficit unexpectedly reached a fresh record in September of USD76bn as imports of capital and consumer goods surged. On the positive side, pending home sales increased 0.5% m/m in September – the first increase in three months. This is a welcome result, given the recent string of soft housing data that has been seen in the US as mortgage rates have been pushing higher.”
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