Markets exhale as MH17 panic abates

Share Markets:

The US stockmarket rebounded as risk aversion driven by the plane disaster in Ukraine faded somewhat.

Technology stocks posted solid gains, boosted by better than expected earnings results from Google.

The Nasdaq jumped 1.6%, the Dow rose 0.7% and the S&P 500 gained 1.0% for the session.

Interest Rates:

US bond yields rose as the safe haven appeal of bonds partially reversed, with weaker US consumer confidence data appearing to have little impact.

Foreign Exchange:

Improved risk appetites saw the Aussie dollar strengthen against the US dollar and the other major currencies.

AUD/USD rose from 0.9347 on Friday morning, to currently trade around 0.9397. The New Zealand dollar underperformed the Aussie, with AUD/NZD rising to 1.0806 this morning, from 1.0786 on Friday morning.

The Yen fell on a reversal of earlier safe haven flows. Sterling fell against the US and Aussie dollars on rumours Bank of England Governor Carney had given a dovish interview to a newspaper, however, Sterling retraced some of that weakness after a Bank of England spokesperson denied the rumour.

The Euro edged higher against the US dollar despite the Bank of Italy cutting its economic outlook.

Commodities: 

Prices in oil and gold pared gains on Friday, but the geopolitical risks from Gaza and the downing of the Malaysian plane saw prices still higher for the week.

Copper prices weakened on concerns about the downturn in Chinese property.

Australia:

There was no significant economic data released locally on Friday.

Europe:

The Euro zone current account surplus narrowed by just over €2bn to €19.5bn in May.

United States: 

The improvement in consumer confidence in June was not sustained in July, according to the University of Michigan measure. It fell to a four-month low of 81.3 in July, from 82.5 in June, defying consensus expectations for further improvement.

The US leading index of economic activity rose 0.3% in June. Although this was a softer than consensus expectations, it followed an upwardly revised 0.7% increase in May (previously reported as a 0.5% rise).

The Philadelphia Fed business outlook survey jumped to 23.9 in July, from 17.8 in June, indicating firms in the area were feeling more optimistic. The index is at its highest since March 2011.


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