Morning Market Update: April 10

April 10th, 2013 by

The FOMC minutes for March were accidentally released a day early to a limited number of people, as some Congressional staffers and trade organization officials were emailed the minutes at 2pm yesterday, instead of 2 pm today. Due to this slip up, the Fed released the report to the public at 9am today instead of the customary 2pm.

The news, such as it was (some reserve bank presidents want to end QE before the end of the year, some don’t,) was just more fuel to the fire that is the stock market, but didn’t affect gold or silver much at all. Gold had drifted slightly lower in Europe overnight before the official release of the FOMC minutes.

News of strong Chinese import data also helped the market surge in New York this morning, as the S&P 500 hit an all-time intraday high. Oil futures are softer on news of increased inventory, while the dollar is higher.

The improving dollar is despite the fact that the euro is back above 1.30 versus the greenback. This is due to the plunging yen. The yen is at a three-year low versus the euro, but is being defended against the dollar by holders of large dollar/yen options. The Nikkei closed at its highest level since August 2008, but institutional money is fleeing Japanese bonds.  This money is landing in Europe, where even Italian and Spanish bond yields are being driven lower by demand.  This is being driven by never-before seen levels of quantitative easing announced by the Bank of Japan.

Chinese stocks were mostly flat on the unexpected trade deficit announced yesterday. Hong Kong shares were only slightly up on light volume.

Gold has once again shown its sticky range-bound behavior, where bullish news like Cyprus and North Korea nor bearish news like good economic data seems to be able to move it far in either direction. Another constant is the amount of money being printed by the major central banks and injected into the financial markets on a daily basis. More decision makers, including in the Federal Reserve, are concerned about the fallout when the inflation shoe finally drops.

by David Peterson