Japanese indices rally on Fed speculation, stronger US data

Tuesday, December 17, 2013

Bullish economic data releases helped Wall Street lift higher ahead of the Fed meeting due to start today. Both the DJIA and S&P 500 registered steady gains of 0.82% and 0.63% respectively, with the DJIA building on Monday’s support around 15,750 and the S&P 500 snapping a four day decline. Market sentiment was lifted by better than anticipated industrial production and capacity utilisation data which indicated further acceleration in growth. Industrial production accelerated 1.13% in November against the median estimate of 0.6% according to a Bloomberg survey while capacity utilisation increased to levels last seen in June 2008, rising to 79% which was slightly above the median estimate of 78.4% according to Bloomberg.

A mixed session for Asian stocks ahead of the Fed meeting with Japanese stocks pushing higher while Chinese markets drifted lower. Both the Nikkei and TOPIX managed to recover some of Monday’s losses, adding 0.83% and 0.77% respectively. Chinese indices extended losses with the CSI 300 losing 0.49% and the Shanghai Composite paring 0.45% as participants approached with caution ahead of the FOMC meeting. The yen held near record levels towards 103.00 against the dollar yesterday as Shinzo Abe continues to push for reforms and stimulus to improve export prospects and encourage the recovery in Japan.

Three month LME copper prices rallied for a seventh consecutive session yesterday as intraday prices briefly moved above $7,300/tonne, the highest level since 23rd October. Prices have faced significant resistance around this level over the past few months and despite rallying almost 5% since the start of the month prices are still on track for a 12% loss for 2013. Prices have been supported in recent sessions by falling copper stocks which have reached levels last seen in February.

US IP growth accelerates above 1% for the first time since November 2012

IP CHNG Index US Industrial Pro 2013 12 17 07 39 23

Capacity utilisation rises to 79% as outlook steadily improves.

CPTICHNG Index US Capacity Util 2013 12 17 07 41 26

LME copper prices push higher on lower stocks, resistance towards $7,300 holding firm

 LMCADS03 Comdty LME COPPER 3 2013 12 17 08 08 16

Events for today: Tuesday, 17 December 2013

0930

UK

Nov

CPI & RPI

1000

EZ

Nov

Inflation

1000

DE

Dec

ZEW Index

1330

US

Nov

CPI  & Real Earnings

 View Economic Market Calendar

More from: Kash Kamal