MKS PAMP Group - Europe/US Market Update

Ranges: Europe/US Markets

MACRO:

- US equities were mixed overnight, despite a sharp sell off in oil prices
and softer than expected Chinese manufacturing data which fell to a three
year low.
- Google announced its Q4 result which was much better than expectations -
the stock finished an impressive 8% higher on the day.
- The Dow Jones lost 17.12 points, the S&P500 edged 0.86 of a point lower
whilst the Nasdaq crept up 6.41 points.
- There were losses in energy (-1.9%), financials (-0.6%) and industrials
(-0.3%) whilst utilities (+1%) and telecoms (+0.9%) finished the session in
the black.
- European shares were generally lower. The FTSEurofirst 300 Index lost
0.25%, the UK FTSE declined 0.4% whilst the German Dax shed 0.45%.
- The VIX gauge dropped 1.1% to 19.97.
- The yield on the 10 year US Treasury was 5bps higher at 1.96% whilst the
yield on the two year yield was  2.4bps higher at 0.797%.
- The dollar index lost 0.596 to 99.01. The USDJPY touched a low of 120.67
before bouncing into the close whilst the AUD pushed through 0.7100 to a
high of 0.7120.
- Oil prices were lower. Crude slumped 6.5% to $31.43 whilst Brent was
hammered 5.5% to $34.02
- Base metals were mixed. Zinc gained 1.5% whilst Nickel lost 1.9%.
- US personal income rose 0.3% m/m in December (exp +0.2%), and personal
spending was flat.
- US manufacturing ISM was slightly worse than expected at 48.2 (exp 48.4),
but there was a slight lift on last months downwardly revised 48.
- US construction spending rose 0.1% in December, well below the 0.6% that
was expected.


PRECIOUS:

- A firm session for gold with the market closing on the highs.
- Asia opened towards the days lows, and over the course of the session,
the yellow metal ground its way up to 1124, pushing above Friday night's
highs.
- European trade was fairly subdued. New York were initially on the offer
squeezing the market under 1120 very briefly, but the rest of the session
saw the metal grind its way up towards 1129 which is where it closed.
- Ahead of Chinese New Year, the SGE premium is around $2 over loco London.
- There is reportedly large scale up producer selling providing headwinds
for gold's push towards 1150.
- The 200dma comes in around 1135 which is also providing stern resistance.
- Silver saw some vicious price movement. A large sweep pushed the grey
metal towards 14.20, but in a blink of an eye the market was up at 14.40
before settling at 14.35.
- Palladium consolidated its push above 500 trading up to a high of 506.40.
- Gold ETF's bought 25,146 ozs to total holdings 48,751,256 ozs.
- The Philadelphia Gold and Silver Index rose 3.05% whilst the Gold BUGS
Index climbed 3.10%


PRE-ASIA COMMENTS:

- Asian equities open lower following Wall Street's mixed session.
- Gold is edging higher in the first hour of trade.
- Ahead today:
Australia ANZ Roy Morgan Consumer Confidence
Japan Monetary Base
New Zealand ANZ Commodity Price
Australia RBA Cash Rate Target
Eurozone ECB Coeure Speech
Germany Unemployment Rate
UK Construction PMI
Eurozone PPI
Eurozone Unemployment Rate
Switzerland SNB Jordan Speech
US Federal Reserve George Speech