US and Japanese equities continue slump

Tuesday, April 08, 2014

US markets started the week on the back foot with technology shares leading the decline as investors continued to digest non-farm payrolls numbers released last week. Both the S&P 500 and DJIA faced significant pressure throughout the day despite data showing a buoyant jobs market. Market participants pulled back from the recent rally to record highs on concerns surrounding the pace of cuts to the stimulus programme and speculation regarding the time frame of an interest rates rise.

The weaker market sentiment resonated throughout Japanese equity markets as the Nikkei and TOPIX extended losses. Equity markets slid lower despite the current account balance returning to a surplus after spending the last four months in deficit. Investors seeking safety pushed the yen to a third straight gain towards 102.90 against the dollar from the recent high of 104.13 late last week.

Chinese markets rallied towards a six week high as speculation of stimulus measures encouraged investors back to the market. After consolidating below 2200 over the last two weeks the CSI 300 added 2.35% in overnight trading while the Shanghai Composite gained 1.85% as it tested resistance at the 200 day MA. Investors are optimistic that the government will step up support and attempt to bolster growth after the recent string of poor economic data.

Three month LME nickel prices continue to rally higher on supply concerns as the export ban on unrefined ore imposed by Indonesia fuelled concerns of an impending deficit. Prices have rallied 4.3% over the past six sessions after consolidating just below $16,000/tonne towards the end of March. Early trade this morning tested tentative resistance towards $16,590 before pulling back below $16,500.

Japanese trade balance swings to a surplus in February

JNBPAB Index Japan Balance Of P 2014 04 08 07 27 07

Three month LME nickel prices rally towards $16,500 on supply concerns

LMNIDS03 Comdty LME NICKEL 3 2014 04 08 07 52 16 


Events for today

0930

UK

Feb

Industrial Output

0930

UK

Feb

Manufacturing Output

Topics: JPY, LME, Nickel
More from: Kash Kamal