US job openings expanded strongly in December with the Jolts job index jumping to 5.028m.  The reading, higher than the 4.847m level of November and expectations for an increase to 4.99m, was the highest level seen since January 2001. Elsewhere new hires rose to 5.148m, up from 5.054m seen previously, while the quit rate, seen as a gauge on labour market conditions given it is voluntary in nature, increased to 2.717m from 2.661m in November.

US small business optimism fell slightly in January after hitting a multi-year high in December with the NFIB index slipping to 97.9. 7 of 10 survey components deteriorated during the month with economic expectations, at 0%, falling heavily from the 12% level of December. Elsewhere hiring intentions slipped to 14% from 15% while the number of firms reporting job openings rose 1% to 26%. Perhaps reflecting the weakness in economic expectations the surveys measure on sales fell 4% to 16% while that for earnings sunk to -19% from -15% in December.

French industrial output grew at the fastest pace since November 2013 in December with an increase of 1.5% reported. The figure, dwarfing the 0.2% contraction of November and expectations for an increase of 0.4%, was led by a strong expansion in manufacturing which grew by an impressive 1.2%. Although an impressive headline beat, putting the one-off increase into perspective, total output still remains some 1.3% below those levels of a year ago. Adding to optimism generated by the French result Italian output grew by 0.4% in December, ahead of forecasts for no change overall, with the annual rate, adjusted for working days, jumping to 0.1% from -1.9% in November. While the figures from the continent were strong those from the UK disappointed on the downside with a contraction of 0.2% reported. The decline, following flat growth in November, left annual growth at 0.5%, the slowest expansion seen since August 2013. A 3.1% drop in oil and gas extraction was enough to offset small increases in manufacturing and utility output.

‘Global (crude oil) supplies fell by 235 000 barrels per day in January to 94.1 mb/d on lower OPEC and non‐OPEC production’ according to the latest Oil market report (OMR) released by the IEA overnight. On demand the group stated that ‘growth for 2015 is unchanged from the January OMR, at 0.9 mb/d, bringing average demand for the year to 93.4 mb/d’ with ‘growth expected to gain momentum from a modest 0.6 mb/d gain in 2014 on a slightly improved macroeconomic outlook.’ In the accompanying medium-term oil market report released alongside the monthly OMR the group stated that ‘barring any unexpected supply disruption or major, energy-related change in policy, the (crude oil) market rebalancing will likely occur relatively swiftly but will be comparatively limited in scope, with prices stabilising at levels higher than recent lows but substantially below the highs of the last three years.’


The Day Ahead (AEDT)

CBA, AGL, CSL, Suncorp, Boral and Computershare headline the domestic corporate earnings calendar today.

Japanese markets will be closed for the National Founding Day Holiday.

The ASX 200 looks set to resume its winning ways this morning with SPI futures pointing to a rise of 24pts on the open. Given the domestic market has largely ignored the events in Greece of late it’s likely that the CBA H1 profit announcement, something that will be influential given it’s the not only the largest individual component in financials but also the entire index, will determine how the local market will perform today. Can the headline and internals justify the 10% plus gains seen in financials since late January? That answer will be delivered before the start of trade.

The AUDUSD has fallen modestly overnight as weakness in crude oil futures, along with another strong read on US labour market conditions, saw the greenback strengthen against a majority of peers. With no major data scheduled domestically and Japan off on holidays a quiet day of trade is expected. Support is layered between .7750-60 and at .7720 with resistance kicking in at .7790 and again at .7840.

Domestic data releases today include the Westpac-MI consumer sentiment gauge for February (1030) along with housing finance data for December (1130). Given consumer sentiment has tended to track the Prime Minister’s approval rating since he took office in late 2013 it will be interesting to see whether the recent rate cut from the RBA will be enough to break this correlation today. Elsewhere, given the admission from the RBA that they are ‘working with other regulators to assess and contain economic risks that may arise from the housing market’, the housing finance data may well be influential, particularly the investor lending component. Aside from the domestic data markets will also get unemployment and terms of trade figures from South Korea along with new banking lending in China.

A quiet data calendar this evening with crude inventory levels, Federal budget figures and the latest MBA mortgage market index rom the States the only releases of note. While there is little on the data front the Eurozone finance Ministers meeting, scheduled for the early hours of tomorrow morning, should garner plenty of attention. Who will blink first, Greece or other member States, when it comes to proposed changes to their current bailout program?


Market Map Feb 11 2015


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