The Nikkei Up 2 Percent On A Weaker Yen

Asian markets soared higher today as investors cheered good global PMI data. Also an ever weakening yen sent the Nikkei on a rally.

The Nikkei soared 2.5 percent as the yen flirted with $100 versus the U.S. dollar. Better that expected manufacturing numbers (PMI) in Europe and China boosted investor confidence in the global economic recovery. Euro zone factory data was up at its fastest pace since May 2011. This comes after HSBC/Markit reading showed China’s PMI at a four month high.

U.S. Markets were closed for Labor Day

STOCKS

The Nikkei 225 jumped 2.5 percent led by exporters as the yen traded around 99.67 versus the U.S. dollar. The yen is now at a one month low versus the Dollar. The market has crossed 13,900 and has hit a two and a half week high. The Australian S&P/ASX is now at a three and half week high at 5,201.40. The Kospi has hit a three month high and the Shanghai Composite was up 0.5 percent for the day.

Of interesting note, the Tokyo Electric Company rallied two percent after the government announced new measures to stop the flow of radioactive water out of the Fukushima Daiichi Plant.

European markets were up as a possible Syrian strike was delayed. The FTSE Euro First 300 closed up 1.7 percent. London’s FTSE was also up over one percent as was the DAX which closed up 1.4 percent. Vodafone announced it was selling its 45 percent stake in Verizon for £130 billion. This sent the British telecommunication company soaring 3.37 percent on the day.

CURRENCIES

The EUR/USD (1.3189) is now below 1.3200. We are looking soft to test 1.3000. Please see the below chart.

The GBP has risen higher against the Euro, as expected and is trading neat 0.8480. This comes after the British PMI rose to 57.20. We could now target 1.5700 against the Dollar if support at 1.5490 holds. The USD/JPY (99.45) has risen sharply. We now have key resistance at 110.00. The AUD/USD (0.8983) has moved up ahead of the Royal Bank of Australia (RBA) meeting later today. It has recovered from 0.8900 and could now test 0.9000.

COMMODITIES

Brent WTI Crude (114.20) recovered sharply from a support seen near 112.00, however the resistance at 115.000 should cap any gains. Copper (3.921) is up on China’s PMI. While above 3.20 we can target 3.30 and then 3.40.

Gold (1392.40) has found support at 1375 and recovered. We are hesitant here and need direction as the commodity looks range bound from 1350 to 1400 at this point.

TODAY’S OUTLOOK

Today we get a plethora of data out of the United States as they come back from a long weekend. The States will release their PMI, ISM manufacturing, construction spending and we get remarks from Fed President Kodak.