Domestic car market slows while markets hold breath for Fed

Share Markets: 

Markets were generally soft overnight as economic news leant towards the downside.

The OECD reduced its forecasts for Eurozone economic activity and industrial production in the US fell for the month of August.

The US Nasdaq was down 1.1% on profit taking while the S&P500 was down just 0.1%. The Dow ended the session up 0.3%.

In Europe, the FTSE100 rose 0.1% but the Dax fell 0.3%. The market's tone appears nervous in the face of sanctions on Russia, conflict in the Middle-East and the potential for higher interest rates in the US.

Interest Rates:

US 10 year government bond yields slipped back two basis points to 2.59% on the weaker than expected industrial production numbers.

Two year yields also fell 2 basis points while three month yields were flat at 0.01%. In the UK, long bond yields moved higher but in Germany they slipped on the OECD forecasts.

Foreign Exchange:

The AUD held above US 90 cents overnight as the USD index remained elevated after its strong run upwards earlier in the month.

The EUR slipped initially on its trade resul but recovered later in the session.


Oil, copper and gold all edged higher overnight.

The tentative mood in commodity markets reflected the subdued nature of trading across all markets ahead of the US Federal Reserve's FOMC meeting later this week.

Markets are expecting the meeting to give guidance on the possible timing of future US interest rate movements.


New motor vehicle sales fell 1.8% in August. Despite a decline of 3.5% in the year to August, new motor vehicle sales remain at a reasonably high level.


The Eurozones trade surplus narrowed from €13.8bn to €12.2bn in July, with exports down 0.2% (second consecutive decline) but imports up 0.9%.

The OECD cut its forecasts for Europe and other major trading blocs overnight.

The OECD reduced its forecast for Eurozone growth in 2014 from 1.2% to 0.8%.

United Kingdom: UK house prices rose 7.9% in the year to September, according to the Rightmove index of asking prices.

Prices had risen 8.9% in the year to May but then slowed to 5.3% growth in the year to August.

United States:

US industrial production fell 0.1% in August, as a 7.6% fall in auto production pulled factory sector output down 0.4%.

But utilities gained 1.0% in August after a July fall due to mild weather limiting the use of air-conditioning that month; mining was up 0.5% in August.

Despite the decline in industrial production during August, growth over the year was still a robust 4.1%.

The US New York Fed factory index bounced from 14.7 to 27.5 in September, the highest in almost 5 years.

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