German Factory Orders Rise

News Event

From Trading Economics: German industrial orders rose 4.9 percent month-on-month in October of 2016, following a downwardly revised 0.3 percent drop in September and beating market consensus of a 0.6 percent gain. It was the fastest growth since since July 2014, driven by strong demand from both domestic (+6.3 percent) and overseas (+3.9 percent). Orders for investment goods went up the most by 7.2 percent, followed by demand for basic goods (+1.8 percent) and that for consumer goods (+0.5 percent). While new orders from the euro area remained unchanged, those from other countries were up by 6.3 percent. Factory Orders in Germany averaged 0.37 percent from 1952 until 2016, reaching an all time high of 27.10 percent in June of 1975 and a record low of -15.70 percent in July of 1975.

Market Opening Wrap

In Asian Equity Markets Japan's Nikkei index rebounded on Tuesday as strong U.S. economic data helped calm worries about instability in the European Union after Italian Prime Minister Matteo Renzi's resignation. The Nikkei ended 0.5 percent higher to 18,360.54. The broader Topix rose 0.7 percent to 1,477.20 and the JPX-Nikkei Index 400 gained 0.6 percent to 13,238.63. MSCI's broadest index of Asia-Pacific stocks outside Japan bounced 0.7 percent, its biggest daily rise since Nov. 22, breaking two days of falls. Korea climbed 1.4 percent. With financials under pressure, both the blue-chip CSI300 index and the Shanghai Composite Index fell, significantly underperforming regional markets.

In Currency Markets the euro steadied on Tuesday, having bounced from a near 21-month low set the previous day after Italian Prime Minister Matteo Renzi's loss in a referendum over constitutional reform, an outcome that traders had widely expected. The euro eased 0.1 percent to $1.0757. On Monday, it ended up gaining 1 percent on the day, having bounced from a low of $1.0505 set in Monday's early Asian trade.  Against the yen, the dollar held steady at 113.79. The Australian dollar was weighed down after the Reserve Bank of Australia kept interest rates unchanged but sounded cautious on economic growth. The Aussie was last down 0.2 percent on the day at $0.7460. The dollar was little changed at 100.16, not far from Monday's low of 99.849.

In Commodities Markets crude oil prices fell in Asia on Tuesday with U.S. industry inventory estimates ahead expected to set the tone. U.S. crude for January delivery lost 0.98 percent to $51.28 a barrel. Brent crude was last quoted at $54.22 a barrel. Gold eased on Tuesday in Asia after an early round of bargain hunting as investors look beyond the widely expected Fed rate hike this month for any new language on the pace of increases going forward. Gold fell 0.07 percent to $1,175.65 a troy ounce. Elsewhere in metals trading, silver for March delivery rose 0.08 percent to $16.913 a troy ounce, while copper for March delivery fell 0.45 percent to $2.682 a pound.

In US Equity Markets stocks rose on Monday, with the Dow Jones industrials setting fresh record highs, as services sector data gave further evidence of strength in the domestic economy. The S&P 500 gained 0.58 percent, to 2,204.71 and the Nasdaq Composite added 1.01 percent, to 5,308.89.  Big tech names also lifted the S&P 500 and helped the Nasdaq outperform on Monday. Amazon.com rose 2.6 percent as it said it opened a brick-and-mortar grocery store in Seattle without lines or checkout counters. Health insurers Aetna and Humana fell 3 percent and 2.2 percent, respectively, as a trial over their proposed merger kicked off. The health sector fell 0.2 percent and was the worst-performing group.

In Bond Markets Japanese government bond prices fell on Tuesday, with the benchmark yield climbing to a 10-month high, as a weak liquidity-enhancing auction and firmer Nikkei weighed on the market. The 10-year JGB yield was up 2 basis points at 0.045 percent after touching 0.050 percent, its highest since Feb. 18. JGB yields have climbed steadily over the past month, tracking the rise in global bond yields. The 30-year yield was 3.5 basis points higher at 0.620 percent.

Source: Institute of Trading and Portfolio Management