Markets Overnight: Asia Mostly Red, Emerging Market Policymakers React to Fed

by Enis September 24, 2013 4:35 am • Commentary

Financial assets were relatively quiet in the overnight session.  U.S. economic releases today include housing data at 9:00 am EDT, and the Richmond Manufacturing Index and Consumer Confidence at 10:00 EDT.

  1. Asian Equities Mostly Red – China’s Shanghai index was down 1%, led by financial companies, partly on speculation that the government was encouraging more competition by allowing non-bank entrants into the sector.
  2. Emerging Market Policymakers React to Fed – South Korean’s finance minster discussed measures to combat volatility in the Won after the Fed’s decision.  Indonesia’s parliament considered plans to entice foreign investors to combat the falling Rupiah.  Turkey’s central bank head, Erdem Basci, said that his recent 1.92 year-end prediction for USD/TRY was meant to instill confidence in markets, and the central bank was still willing to use its dollar reserves to support the currency.
  3. European Stocks Reverse on German IFO Miss – European stocks were mostly green to start the day, but are now trading closer to flat after the 4:00 am EDT release of the German IFO index slightly missed expectations.  Utilities are the best performers and industrials and financials are the worse performers.
  4. Commodities Lower, Bonds Higher – Once again, commodities are mostly red overnight, led by copper down 1%, and oil, gold, and silver all lower as well.  Global government bonds were mostly higher, with the U.S. 10 year yield near a 1 month low, at 2.68%.
  5. SPX Futures Down For Fourth Day – Very tight range overnight, where Dec futures traded between 1689.50 and 1694.  The 50 day moving average around 1670 in the futures is the downside level to watch.