Producer Prices in Germany Performed Worst than Expectations

News Event

From Trading Economics: Producer prices in Germany declined by 1.4 percent year-on-year in September of 2016, compared to a 1.6 percent fall in August. It was the smallest decrease since July 2015 while market expected a 1.2 percent drop. Prices fell for energy (- 5.2 percent) and intermediate goods (-1.2 percent). In contrast, cost increased for: non-durable consumer goods (+0.7 percent), capital goods (+0.6 percent) and durable consumer goods (+1.2 percent). The index has been in a decline since August 2013. On a monthly basis, producer prices unexpectedly declined by 0.2 percent, after falling 0.1 percent in August and missing market expectations of a 0.2 percent gain.

Market Snap

Market Opening Wrap

In Asian Equity Markets, Japan's Nikkei index rose to a near five-month high on Thursday morning taking cues from rising U.S. stocks, while most investors are focused on the third U.S. presidential debate. The Nikkei rose 0.9 percent to 17,156.32 in midmorning trade, after hitting as high as 17,167.91 earlier, the highest level since May 31. The broader Topix gained 0.7 percent to 1,366.77 and the JPX-Nikkei Index 400 advanced 0.7 percent to 12,233.16. MSCI's broadest index of Asia-Pacific stocks outside Japan rose 0.2 percent. China's CSI 300 reversed earlier gains to fall 0.1 percent, while Hong Kong's Hang Seng index climbed 0.5 percent. The Australian index, S&P/ASX 200, rose 0.18 percent.

In Currency Markets the euro stood near a three-month low ahead of a European Central Bank meeting later on Thursday, while the Mexican peso rose to a six-week high after the conclusion of the final U.S. presidential debate before the November election. The euro eased 0.1 percent to $1.0969, not far from Wednesday's near three-month low of $1.0955. Against the yen,  the dollar edged up 0.2 percent to 103.62 yen. The pound held steady at $1.2281. The Australian dollar fell 0.6 percent to $0.7679 after a surprise fall in Australian employment in September was seen as adding to the risk of a further cut in interest rates. The dollar was little changed against a basket of six major currencies at 97.925.

In Commodities Markets oil prices fell on Thursday on profit-taking after markets rallied the previous day due to a draw in U.S. stocks and an expectation of an OPEC-led cut in production. U.S. West Texas Intermediate crude oil futures were trading at $51.38 per barrel, down 22 cents from their last close. Brent crude futures were trading at $52.56 per barrel, down 11 cents. Spot gold had risen 0.3 percent to $1,272.20 an ounce. On Wednesday, it had hit its strongest since Oct.5 at $1,273.34. U.S. gold futures were up 0.3 percent at $1,273.20 an ounce. Meanwhile, spot silver was up about 0.2 percent at $17.67 an ounce. Platinum fell 0.1 percent to $941.75, while palladium rose 0.7 percent to $640.10.

In US Equity Markets  stocks notched a second straight day of gains on Wednesday, as climbing oil prices lifted the energy sector and earnings from Morgan Stanley provided a boost to financials. The S&P 500 gained 0.22 percent, to 2,144.29 and the Nasdaq Composite added 0.05 percent, to 5,246.41. The energy sector rose 1.4 percent. A 4.2-percent rise in Halliburton also provided a boost after the world's No.2 oilfield services provider posted third-quarter results. Morgan Stanley gained 1.9 percent after posting a better-than-expected quarterly profit to round out a string of solid results from big U.S. banks. A disappointing revenue forecast from Intel capped the advance on Wall Street, however. The chipmaker fell 5.9 percent.

In Bond Markets  Japanese government bond prices gained on Thursday, with the market supported by firm auction results.  The benchmark 10-year JGB yield inched down half a basis point to minus 0.065 percent. The 10-year bond went untraded the previous day, with traders saying the market was slightly less conducive for active trading as price ranges had narrowed under the Bank of Japan's yield curve control scheme. The 30-year yield fell one basis point to 0.490 percent.

Source: Institute of Trading and Portfolio Management