Stocks in all regions were broadly higher overnight, while commodities and bonds were generally under pressure.
- Strong U.S. close carried over to Asian equity markets – Japan and India led the way, up 1.5 and 2.5% respectively. The Indian rupee hit a 2-week high vs. the dollar, and the Nifty Fifty Indian equity index rallied back up to its 200 day moving average, a 10%+ move in the past 10 trading days.
- Better Chinese data – Chinese industrial production growth was better than expected (10.4% vs. 9.9% consensus expectation), continuing a trend of better Chinese data points in the past month. The Shanghai Composite and Hang Seng Indices closed slightly higher. Treasuries came under pressure after the good data, and have been under pressure ever since (10 year yield now around 2.95%).
- Europe nears 2013 highs despite weak data – French industrial production was worse than expected, and Italian GDP was a slight miss, but European stocks are off to a strong start following equity advances in the U.S. and Asia. The Euro Stoxx 50 index is less than 1% from its 2013 high.
- Crude Oil down for second straight day – Yesterday, Russia offered an alternative potential peace agreement to prevent air strikes against Syria ahead of President Obama’s speech on Tuesday night. President Obama has already expressed doubt that he can get congressional approval for a military strike. Technically, the WTI front month crude oil contract has had trouble getting above the $110 level. Most other commodities were also red.
- S&P 500 Index Sept Futures Break 1675 – Heaviest overnight futures volume occurred shortly after the European equity open, as buy stops were clearly hit on the move above 1675 in the Sept futures contract. The 50 day moving average around 1664 is now short-term support.