Market Comment |
Australia |
| The S&P/ASX 200 index dropped 1.44% or 73.665pts to 5027.8 (day range: 5175.3 – 5027.8) on Thursday. The index is below its 20d MA (@ 5269) and below its 50d MA (@ 5459). 16% of the index constituents are above their 20D MA (vs 20% the previous session) and 16% of the shares are above their 50D MA (vs 19%). Appx. 16% of the stocks are ‘oversold’ based on the RSI14 indicator. Trading volume on the index was high, 34.4% above the 3 months average.
The Australian Industry Group Australian Performance of Services Index (Australian PSI) gained 1.5 points MoM to 55.6 in August, the highest level since March 2008. Key findings included: “The retail trade sub-sector expanded for a sixth month (up 3.0 points to 56.8, its fastest pace since October 2009), while wholesale trade (down 3.3 points to 47.2) returned to contraction after a brief expansion in July. (…) The finance & insurance sub-sector added an eighth month of expansion (up 0.5 points to 65.5), while property & business services (up 3.9 points to 58.5) continued July’s improvement. Health & community services (up 6.2 points to 52.9) returned to growth after two months of mild contraction, while hospitality (up 5.2 points to 51.0) ended three months of contraction. (…) All other sub-sectors contracted: personal & recreation services (down 5.0 points to 41.5); communications (up 0.7 points to 39.6); and transport & storage (up 8.9 points to 48.0).” Australia recorded a trade deficit of A$2460M in July (vs a deficit of A$3160M expected, a deficit of A$3050M in June), according to Australian Bureau of Statistics. Australia’s retail sales edged down 0.1% MoM in July (vs +0.4% expected, +0.6% in June), according to Australian Bureau of Statistics. |
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| The US dollar was mixed against its major counterparts on Thursday. On the US economic data front, Initial jobless claims rose more than forecasted reaching 282K for the week ending Aug 29 compared to a revised 270K the week before. Continuing claims reported 2257K for the week ending Aug 22, slightly below the revised 2266K in the week prior. The US trade gap shrank more than forecasted to -41.6B in July from -45.2B in June (-42.2B Estimate). Markit US Composite PMI reported 55.7 for Aug compared to 55 in July.
The Euro was under pressure against all its major counterparts. In Europe, In Europe, ECB kept its main benchmark interest rate at 0.05%, as expected. ECB lowered its growth forecast and inflation rate expectation for 2015,2016 and 2017. Mario Draghi signaled that stimulus measures might be expanded. Separately, euro zone retail sales were up by 0.4% in July (+0.5% expected) after a 0.2% slid in June (revised from -0.6%). Finally, PMI composite index was 54.3 in August in final estimation vs 54.1 expected and 53.9 the month before. UK PMI composite was down to 55.1 in August from 56.6 in July. The Australian dollar was under pressure against its major pairs except for the CHF and EUR. |
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