Morning Market Update: March 27

March 27th, 2013 by

Gold and silver were softer overnight, but are recovering in New York trading. While the dollar is surging again today (DXY over 83) after hitting another 7.5-month high overnight, stocks have opened lower on Wall St. The bond market is rallying, which may be signalling an impending top to the record-setting stock market run. U.S. pending home sales were down 0.4%, which was blamed on low inventory.  Oil is lower on profit taking, after a 5-week high yesterday.

Not only the dollar, but the yen and German bonds are seeing heavy inflows from investors seeking safe haven from the mess in Europe. These assets will see more attention from short-term safe haven investors than precious metals will.

European consumer and business confidence numbers were reported lower after four months of improvement, and this is from data taken before the Cyprus Shock. Italian bond yields yesterday rose to their highest point since October, as the Five Star Movement rebuffed an offer by Bersani’s center-left coalition to form a government.  European stocks were lower overnight, weighed down by the financial sector, as fears that banks in Greece, Spain or Italy could get the “Cyprus Treatment.” The euro is seeing significant downward pressure, trading below $1.28

In Asia, the Nikkei was up on choppy action, supported by good U.S. economic data and anticipation of the “punch bowl” of quantitative easing the Bank of Japan is preparing. Hong Kong stocks were up to the highest point in eight sessions, while Chinese stocks improved slightly on mixed bank profit reports, and the news that the Chinese government intends to reform price controls on domestic oil.

by David Peterson