Corporate risk appetite still up as Govt handouts continue
The Dow flirted with the 16,000 level overnight as cheap money and a modestly growing economy fuelled the appetite for risk.
Comments by Federal Reserve Bank of New York President Dudley were positive on the economy but at the same time raised concerns among speculators regarding the withdrawal of the Fed's stimulus.
In Europe, markets saw a more solid rise with the FTSE100 up 0.4% and the Dax up 0.6%. The Dow ended the session flat while the S&P500 fell 0.5%.
US 10 year bond yields fell 3 basis points to 2.67% as the market took the view that imminent tapering of the US stimulus was unlikely.
All markets are exhibiting volatility as speculation on the timing of 'tapering' waxes and wanes with each economic statistic and every comment by officials within the Federal Reserve system.
In Australia, bond yields were broadly steady.
The US dollar index fell to a two week low overnight but the AUD failed to make up any ground on the USD.
The AUD opens the day at much the same levels as it did yesterday against the USD, NZD and euro but is a touch weaker against yen.
Gold prices fell as investors preferred equities while copper prices fell on concerns that the US housing recovery might be losing steam (see below).
Despite the prospect of a stronger US economy according to Dudley (see above), oil prices moved lower. The prospect of a stronger USD when the US begins tapering will affect the USD price of commodities.
No data was released yesterday.
Property prices continued to rise in China, with higher prices in 69 out of 70 cities. Property prices gained 9.6% in the year to October, the tenth consecutive month of higher property prices in annual terms.
According to Reuters, property prices rose 0.6% in October, down from a 0.7% increase in September.
Statements out of China's Plenum were constructive, outlining many major reforms, including reforms covering market pricing, the economy, finance and ownership.
Eurozone exports were up 1.0% in September.
Despite the fall in September industrial production reported last week, exports posted a rare back to back rise in August and September, of 0.4% and 1.0% respectively, reversing July's 1.2% fall.
In September, imports, which have not risen since June, fell a further 0.3%, so the trade surplus widened to €14.3bn.
UK house prices accelerated from an annual pace of 3.8% to 4.0% in the year to November according to the Rightmove index of asking prices.
The annual pace peaked at 5.5% in the year to August, the anniversary of the start of the Bank of England-Treasury funding for lending scheme (FLS) in August 2012.
FLS and subsequent assistance to borrowers (the government guarantees half the deposit, effectively increasing the amount that can be borrowed) have been credited with boosting house prices but gains have been exacerbated by a shortage of homes for sale.
The National Association of Home Builders' housing market index was steady at 54 in November, its third month without a rise, after peaking at 58 in August, its highest since late 2005.
The sales outlook and prospective buyer traffic deteriorated slightly, but single family home sales were steady in the latest month.
Euro zone inflation was confirmed at 0.74% in the year to October, with the core rate at 0.8% in the year to October, both unrevised from the advance reading.
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