GOOD MORNING ALL TRADERS!HERE'S OVERNIGHT MARKET UPDATE:• US...

GOOD MORNING ALL TRADERS!

HERE'S OVERNIGHT MARKET UPDATE:

• US bond yields were lower overnight following Fed Chairman Bernanke’s comment that the US economy still remains fragile, inflation is under check and that the focus is on getting the economy back on track, dampening speculations of a near-term rate hike. The 2-year yield decreased 7bps to 0.758%, whilst the 10-year yield lost 3bps to 3.442%.

• Australian bond futures moved broadly in line with US Treasuries, underperforming at the short end of the curve. The implied yield on 3-year bond futures was down 4bps to 4.830% (price up 4bps to 95.170) and the implied yield on the 10-year bond futures was down 5bps to 5.425% (price up 5bps to 94.575).

• US equities were trading negative overnight following Bernanke’s comments which offset broker upgrades of managed-care providers. At the time of writing, the DJIA was down 0.2% to 10370, the S&P 500 lost 0.4% to 1102 and the Nasdaq was 0.5% lower at 2184.

• European equities declined as Germany’s factory orders fell unexpectedly casting doubts over the economic recovery in the region. Banks retreated across Europe on rate hike fears and more so in the UK on concerns over greater regulatory restrictions. The DJ Euro Stoxx 50 declined 0.5% to 2896 and the German DAX decreased 0.6% to 5785. The FTSE was lower 0.2% at 5311, dragged lower by mining stocks.

• The Australian SPI 200 Dec 09 futures contract was down 12 points or 0.3% to 4661.

• In a choppy trading session overnight, the USD weakened against major currencies paring gains made earlier in the session on Bernanke’s comments. EUR/USD traded at a low of 1.4756 but later pruned losses on speculation that the Fed will trail other banks in raising interest rates, opening today’s session at 1.4859. GBP/USD traded a wide range overnight, opening Tuesday marginally lower at 1.6462. USD/JPY opens at 89.33 declining steadily overnight.

• The AUD strengthened against major crosses overnight on optimism that global recovery will spur demand for higher yielding assets. AUD/USD gained steadily overnight however opens slightly weaker at 0.9115. AUD/EUR trades at 0.6165 after a quiet session overnight. AUD/JPY was range-bound overnight, opening at 81.84 and the UD/NZD opens at 1.2793 after a whippy session overnight.

• Crude oil declined for the fourth consecutive day and is trading below $75 a barrel as the US dollar strengthened. WTI futures contract for January fell 2.1% to US$73.86 a barrel.

• Spot gold decreased overnight as the US dollar strengthened, eroding the appeal of the metal as an alternative investment. Spot gold decreased 0.6% to US$1,153.90 an ounce.

• LME copper December futures dropped 0.6% to US$6,999 a tonne after inventories monitored by the LME increased. It was mixed for the other base metal futures with zinc and lead decreasing 2.6% and 3.8% respectively, while aluminium advanced 0.5%. Nickel remained unchanged.

• US wheat fell 1.9% on concerns that global production might outpace demand. Corn fell 1.2% on speculation that the US Department of Agriculture will raise its estimate for domestic stockpiles on 10 December, while Soybeans gained 1.0% on expectations that China will boost imports from the US. Sugar decreased 0.3%, while Palm oil futures lost 0.1%.

HAPPY TRADING ALL!