Japanese stocks fall sharply ahead of US employment data

Wednesday, December 04, 2013

Japanese stocks fell sharply in overnight trading with the Nikkei posting its biggest losses in over six weeks as cautious investors took profits ahead of US data. The Nikkei closed 2.17% lower while the TOPIX lost 1.71% throughout the trading session as benchmark equity indices pulled back from six month highs ahead of crucial US jobs and housing market data out later today. A stronger yen trading around 102.70 hurt exporters with the industrials and healthcare sectors leading the declines. Chinese stocks managed to build on the previous session’s gains with both the benchmark CSI 300 and Shanghai Composite indices adding 1.3% throughout the session as stronger US and Chinese manufacturing PMI encouraged market optimism.  

Gold prices continue to soften as the string of positive economic data in recent weeks supports the view that the Fed will begin tapering in the coming months. Spot prices for the yellow metal have dipped below $1,220 for the first time since July with prices this morning erasing yesterday’s gains. Market participants are increasingly growing confident in their expectations that the Fed will decrease its bond buying programme in the coming months, with analysts surveyed by Bloomberg expecting the monthly asset purchases to decrease to $70bn a month at its March meeting.

Robusta coffee prices have posted their largest daily gain in two and a half years as declining inventories prompted a 4.1% rally in second month contracts yesterday. According to NYSE Liffe data, stockpiles have dropped 57% this year as exports from Vietnam plummeted 34% m/m in November to 80,000 tonnes. Despite the rally, which has seen second month prices recover 11.47% throughout November, year-to-date prices are still down 12.2% as improving global production is estimated to outstrip demand well into 2014.

A busy day for economic data today with Eurozone, Chinese, UK and US services PMI due out which will provide investors with further indication of global economic health. US ADP employment data for November will be out later this afternoon and with jobless claims, non-farm payrolls and unemployment data due out later this week, market participants will have plenty to keep them busy.

 

Lower inventories have supported London coffee prices in recent weeks

DF2 Comdty Generic 2Nd DF Fut 2013 12 04 07 53 36



Events for today: Wednesday, 4 December 2013

0145

CN

Nov

HSBC Services PMI

0230

CN

Nov

Hong Kong PMI

0855

DE

Nov

Services PMI

0900

EZ

Nov

Services PMI

0930

UK

Nov

Services PMI

1000

EZ

Oct

Retail Sales

1000

EZ

Q3

GDP Revised

1330

US

Oct

Trade Balance

1500

US

Nov

ISM Non-Manufacturing

1500

US

Oct

New Homes

1530

US

w/e

EIA Energy Stocks

View Economic Market Calendar

Topics: Nikkei, Gold, PMI, Coffee, TOPIX
More from: Kash Kamal