Stocks surge, US dollar rallies, Aussie crushed

Quick Recap

A huge night for stocks across the planet and the US dollar which has once again pushed higher.

Looking at stocks first and the rally that began in Shanghai on hopes of more stimulus yesterday swept around the world and was built on by some pharmaceutical mergers and acquisitions on both sides of the Atlantic. In the end that drove most of the big markets a percent or more higher with the FTSE the only laggard.

On currency markets the Aussie was hammered lower on the back of iron ore’s continued fall, speculation about a rate cut next week and the US dollar surge. That’s left it as the weakest of the big currencies with a  fall of around 1.5% compared to the 0.6% falls on most of the other Majors. The Yen lost 0.9%.

I’ve had a look at the Aussie over at Business Insider earlier this morning.

Gold was lower as well.

One thing worth noting, as I highlighted last night in my Asian wrap, is that volatility could rise this week as we come up to the Easter break in Western markets. This is more acute than normal because US non-farms are scheduled to be released on Good Friday. That may sound mad but I remember at least once in my career when this did happen. Markets mostly won’t be open so it is a massive event risk. SSSSSthing to be very wary of.

On the day

On the data front today we’ll have ANZ Roy Morgan weekly consumer confidence at 9.30 AEDT, HIA new home sales at 11am and the credit at 11.30 AEDT. Japan will release vehicles and housing starts data while in Germany tonight we get retail sales and unemployment. In the UK there’s Q4 GDP and then the EU-wide CPI. In the US tonight the Case Shiller house index will be interesting, as will Chicago PMI and the consumer confidence data.

And here’s the overnight Scoreboard (8.45 am AEDT):
Here’s the overnight scoreboard:

• Dow Jones up 1.49% to 17,976
• Nasdaq up 1.15% to 4,947
• S&P up 1.22% to 2,086
• London (FTSE 100) up 0.53% to 6,891
• Frankfurt (DAX) up 1.83% to 12,086
• Paris (CAC) up 0.98% to 5,083
• Tokyo (Nikkei) up 0.65% to 19,411
• Shanghai (Composite) up 2.62%!!! to 3,787
• Hong Kong (Hang Seng) up 1.51% to 24,855
• ASX Futures (SPI June) up 49 points to 5,898
• AUDUSD: 0.7648
• EURUSD: 1.0825
• USDJPY: 120.12
• GBPUSD: 1.4805
• USDCAD: 1.2678
• Crude: $48.74
• Gold: $1,185

CHART OF THE DAY:

EURUSD, 4 hour:  – Level to watch 1.0793/98. If it breaks there’s 30 points in it and then 1.0604 offers support

Yesterday I said “AUDUSD: Looking to test support - 0.7713/21 needs to hold otherwise it could slip to the mid 76 cent region.” That is what we have seen and 0.7608 is the next level of support.