US jobless claims support risk assets higher

Friday, December 27, 2013

Asian stocks ended the week on a positive note with Japanese equity indices rallying for a third straight session on better than expected US jobless claims and easing money market conditions in China. Market participants welcomed the stability, supporting risk assets higher as the Nikkei closed marginally in positive territory while the TOPIX added 0.84% throughout the day. Chinese indices were also well supported as the central bank took steps to ease the credit crunch prompting the seven day repo rate to fall back towards 5% after spiking to almost 9% last week. The Shanghai Composite closed 1.36% higher while the CSI 300 added 1.68% throughout the day.

US equity markets extended gains, pushing to new record highs after yesterday’s release of initial jobless claims came in 7,000 lower than expected at 338K new claims for the week ending 21st December. Both the S&P 500 and DJIA were supported higher by the renewed optimistic outlook, adding 0.47% and 0.75% respectively throughout the session. The S&P 500 has gained almost 30% in 2013, in line for its best annual return since 1997. Owing to the bullish labour market outlook and Fed tapering, consumer confidence as measured by the Bloomberg Consumer Confidence Index increased to its highest level since August, rallying for the fifth straight session.

Spot gold prices managed to recover above $1,200/oz throughout the week as prices climbed towards $1,210 but the yellow metal is still headed for a fourth consecutive monthly loss and is currently down 27.5% throughout the year. Confidence in US stocks after the Fed announced tapering has prompted steady outflows from gold ETFs with total outflows of all known gold ETFs leading to a 33% year-to-date decline in holdings.  

Seven day repo rate in China drops towards 5%

 RP07 Index CHINA INTERBANK REPO 2013 12 27 07 55 44

S&P 500 rallies to new record high on US jobless claims

 SPX Index SP 500 Index Daily 2013 12 27 08 04 31

Consumer confidence pushes towards August highs on improving outlook

COMFCOMF Index Bloomberg US Wee 2013 12 27 08 08 13

Gold prices are on track for signficant losses this year

XAU Curncy Gold Spot Oz Y 2013 12 27 08 16 31

Events for today: Friday, 27 December 2013


Dec  Natural Gas (NYMEX)

Dec Heating Oil & RBOB (NYMEX)

Dec  Copper, Gold & Silver (COMEX)

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More from: Kash Kamal