As London/European traders head home, the major European stock indices are closing with mixed results. The UK’s FTSE 100 led the gains, followed by France’s CAC and Germany’s DAX. Spain and Italy moved lower.
The closing snapshot shows:
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Germany’s DAX: +69.41 points or +0.27% at 25,368.03.
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France’s CAC: +61.59 points or +0.78% at 7,934.71.
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UK’s FTSE 100: +115.47 points or +1.08% at 10,840.34.
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Spain’s IBEX 35: −53.00 points or −0.28% at 19,177.71.
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Italy’s FTSE MIB: −356.29 points or −0.72% at 49,397.56.
The spread between the UK and Italy was about 1.8 percentage points. Buyers had the upper hand in some markets, but the gains were far from uniform.
European bond yields move lower
Benchmark 10-year yields fell across the major European markets, with Spain and Italy leading the declines:
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Germany:3.412%, down 3.0 basis points.
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France:4.794%, down 6.7 basis points.
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UK:5.379%, down 4.1 basis points.
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Spain:4.023%, down 7.0 basis points.
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Italy:4.491%, down 6.9 basis points.
French, Spanish and Italian yields fell more than Germany’s, narrowing their yield spreads against the German benchmark.
US stocks: Dow higher. Nasdaq lower. S&P above and below unchanged.
The US stock market is also showing a split as European traders exit:
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Dow Industrial Average: +495.03 points or +0.96% at 52,121.20.
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S&P 500: +8.30 points or +0.11% at 7,727.24.
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Nasdaq Composite: −97.11 points or −0.36% at 26,595.75.
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Russell 2000: +22.34 points or +0.82% at 2,751.87.
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Nasdaq 100: −180.23 points or −0.60% at 29,770.58.
The Dow and small caps are outperforming, while the technology-heavy indices remain under pressure. Lower yields are providing a more supportive backdrop, but technology buyers still have some work to do.
Treasury yields retreat, led by the longer end
US Treasury yields are lower across the curve despite the higher PPI data:
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2-year:4.770%, down 3.2 basis points.
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5-year:4.861%, down 4.9 basis points.
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10-year:5.102%, down 8.8 basis points.
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30-year:5.429%, down 9.5 basis points.
The larger declines in longer-dated yields are flattening the curve.
Dollar mostly lower. Australian dollar bucks the trend.
The USD is lower against most major currencies in the snapshot:
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EURUSD:1.1204, up 0.43%.
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GBPUSD:1.3250, up 0.45%.
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USDJPY:158.19, down 0.08%.
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USDCHF:0.8293, down 0.64%.
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USDCAD:1.4195, down 0.29%.
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NZDUSD:0.5607, up 0.29%.
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AUDUSD:0.6913, down 0.80%.
The Australian dollar stands out for its weakness despite the broader selling in the greenback. The weaker than expected Australian employment sealed the bearish fate of the AUDUSD today although the price is off the lows (see post on the technicals for the AUDUSD here).
Looking at the EURUSD, the price decline (higher USD) after the PPI and other data found support buyers at the 100 hour MA at 1.11867. The price is back above the 200 hour MA at 1.1201. The 100 hour MA is the barometer for bulls and bears. Stay above keeps the buyers in play. Move below and the sellers are in full control.
The GBPUSD also held near the 100/200 hour MAs. Both MA are near each other at 1.32327. On the topside, the 1.3273 needs to be broken and stay broken to increase the bullish bias.
This article was written by Greg Michalowski at investinglive.com.