Global Markets Overview – December 8, 2014

Men load pieces of steel at a steel factory in Chau Khe village, outside Hanoi December 4, 2014. The World Bank said on Wednesday it has revised its forecast for Vietnam's economic growth this year to 5.6 percent from 5.4 percent previously, after the government said it expects the economy to accelerate this year. REUTERS/Kham (VIETNAM - Tags: BUSINESS POLITICS EMPLOYMENT)

US jobs growth drives the greenback

The US dollar has been broadly bid higher as investors react to Friday's jobs numbers. The November payrolls reading showed 321,000 jobs were created and average hourly earnings rose 0.4%, while the unemployment rate was steady at 5.8%. This was the highest number of jobs created in nearly three years and was also accompanied by upward revisions to the previous two months. Heading into next week's Fed meeting, this jobs report is only fuelling the case for the hawks.

Also of note was the fact US equities rose on the back of the data, showing good economic data is turning into a positive. This perhaps suggests investors are settling into the idea of tightening, with pessimists starting to turn as well. It seems a mid-2015 hike is a real possibility and this is likely to continue driving the greenback higher.

The big move was in USD/JPY, which managed to rally through ¥121.00 and has got off to a strong start, currently trading around ¥121.64. This will see the Nikkei trade through 18,000 today with a gain of nearly 1%.

Out of Japan we get the final Q3 GDP reading; remember the first estimate showed the nation has slipped into recession. Apart from data, it will be all about the lead in to Sunday's lower house election as Abe looks to maintain control and put key personnel in key positions to drive his growth agenda.

AUD breaks to new lows

AUD/USD has got off to a subdued start and has gapped below $0.8300. With the greenback strengthening, commodities remaining subdued and the Murray Report all on the table, these factors have combined to weigh on the pair. AUD/USD was last under $0.8300 in July 2010, after which it went on to trade as low as $0.8067.

Needless to say it is looking very vulnerable at the moment and the bears will be looking for momentum plays here. On the local economic calendar we have ANZ job ads, NAB business confidence and conditions, and then on Wednesday we have Westpac consumer sentiment and home loans.Thursday will be the big one when we get jobs numbers. There are also a number of releases from China, including trade balance, CPI, PPI, industrial production, retail sales and fixed asset investment data. This is likely to have a bearing on how risk trades this week.

Banks likely to be in focus

Ahead of the local market open we are calling the ASX 200 up 0.4% at 5355. The main focus today will be on how banks respond to the Murray Report, as it recommends banks raise their capital. However, the results have been broadly expected and most analysts feel it'll have limited impact on share prices.

Additionally, the timeline for the whole process is likely to drag on, limiting the need for any capital raising. Investors will also focus on mining services companies and the potential for M&A activity following Bradken's takeover approach last week. There are already reports suggesting CSR could be interested in Downer.

Asian markets opening call	Price at 8:00am AEDT	Change from the Offical market close	Percentage Change
Australia 200 cash (ASX 200)	5,355.80	20	0.38%
Japan 225 (Nikkei)	18,069.00	149	0.83%
Hong Kong HS 50 cash (Hang Seng)	24,200.20	198	0.82%
China H-shares cash	11,715.50	115	0.99%
Singapore Blue Chip cash (MSCI Singapore)	374.62	1	0.22%
US and Europe Market Calls	Price at 8:00am AEDT	Change Since Australian Market Close	Percentage Change
WALL STREET (cash) (Dow)	17,965.50	64	0.36%
US 500 (cash) (S&P)	2,076.75	4	0.22%
UK FTSE (cash)	6,759.00	64	0.98%
German DAX (cash)	10,088.40	181	1.82%
Futures Markets	Price at 8:00am AEDT	Change Since Australian Market Close	Percentage Change
Dow Jones Futures (December)	17,945.00	54.50	0.30%
S&P Futures (December)	2,076.00	4.38	0.21%
ASX SPI Futures (December)	5,360.50	22.50	0.43%
NKY 225 Futures (December)	18,080.00	187.50	1.05%
Key inputs for the upcoming Australian trading session (Change are from 16:00 AEDT)	Price at 8:00am AEDT	Change Since Australian Market Close	Percentage Change
AUD/USD	$0.8309	-0.0067	-0.77%
USD/JPY	¥121.620	1.585	1.32%
Rio Tinto Plc (London)	£29.14	-0.20	-0.68%
BHP Billiton Plc (London)	£14.80	-0.20	-1.33%
BHP Billiton Ltd. ADR (US) (AUD)	$30.32	-0.10	-0.34%
Gold (spot)	$1,193.05	-9.40	-0.78%
Iron Ore (62%Fe Qingdao)	$71.77	0.52	0.73%