Europe
It’s been somewhat of a mixed bag today with early trading in Europe being somewhat weaker after US markets closed lower on the back of US investors mulling the prospect of a change in tone in the Feds guidance at next week’s FOMC meeting.
European markets did manage to pick themselves up mid-morning after comments from Chinese Premier Li when he stated that the Chinese economy wouldn’t have a hard landing and that the government would take steps to ensure a medium to high growth rate, by deepening policy changes to promote business investment.
The effect proved to be somewhat limited in nature given the still weak and underwhelming economic outlook throughout Europe, and subsequently saw stocks drift back from their intraday highs as investors continued to play a watching brief as events continued to play out in Scotland.
Standard Life Plc (LONDON:SL) shares reacted calmly to the announcement that the company would consider relocating south of the border in the event of a “yes” vote.
The basic resource sector did experience a small rebound but continues to be weighed down by the continued decline in iron ore prices.
On the downside Admiral Group (LONDON:ADML) shares have slid sharply to nine month lows, after they went ex-dividend today, while Apple Inc (NASDAQ:AAPL) supplier ARM Holdings (LONDON:ARM) has lost ground as investors digested last night’s big media event, with investors coming away feeling largely underwhelmed.
On the plus side Kingfisher (LONDON:KGF) shares are having a positive day after the company announced it was replacing its CEO with the head of its Castorama unit Veronique Laury, as the company announced a 6.5% drop in pre-tax profits for the first six months of this year.
House builderBarratt Developments (LONDON:BDEV) is also having a good day after the company posted a decent set of results and announced a series of special dividends over the next three years.
US
It’s been somewhat of a data light week for US markets and with nothing else to focus on its perhaps not surprising that investors have had one eye on next weeks Fed meeting. This probably accounts for last night’s sell-off as caution sets in ahead of the end of the Fed’s tapering progam next month.
Apple Inc (NASDAQ:AAPL) shares will be in focus today after the somewhat underwhelming response to last night’s product launch of the new iPhone 6, and the new products, the Apple Watch and Apple Pay.
This was always the risk given the hype leading up to the event that we could see some share price weakness as expectations had been so high that Apple would have really needed to knock it out of the park, and they didn't really do that. This has prompted one broker, Pacific Crest, to downgrade the stock to a "hold", though Goldman Sachs has reiterated its “buy” recommendation, saying that the launch had met expectations.
Microsoft Corporation (NASDAQ:MSFT) is also in the news after the company announced it was looking to tie up a $2bn deal to buy Minecraft creator Mojang, as it looks to beef up its gaming business for the Xbox One.
FX
The AUDUSD is suffering a double whammy of a disappointing consumer confidence survey and sinking iron ore prices which have sent it to six month lows against the US dollar, breaching its 200 day MA for the first time since March, in the process.
The EURUSD has started to pick up some traction despite concerns about European growth prospects. This may be down to a bit of a selloff in European bonds which is pushing yields higher across the spectrum, with Spanish debt seeing its yield rise 25 basis points in the last three days.
The GBPUSD appears to be stabilising for now as Westminster leaders spend the day making the case for the Union in Scotland, with the swing undecided voters likely to be the key battleground in the next few days.
The CHFUSD has also weakened sharply on the back of chatter that the Swiss National Bank might be open to negative deposit rates.
Commodities
Iron ore prices have continued to decline and this has acted as a drag on the rest of the commodity space with Copper prices also looking weak despite this morning’s policy pledge from the Chinese premier.
Gold has also continued its recent decline as expectations about higher US rates weigh on the upside.
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