Global Markets Overview – November 21, 2014

People are reflected on an electronic board showing the Japanese yen's exchange rate against the U.S. dollar outside a brokerage in Tokyo November 20, 2014. Asian stocks mostly fell on Thursday as fresh data signalling a further loss of momentum in China's economy weighed on sentiment, while the yen slid to multi-year lows against the dollar and euro. The dollar hovered near a new seven-year peak of 118.275 yen reached early in the session. REUTERS/Toru Hanai (JAPAN - Tags: BUSINESS)

Global markets were mixed as investors focusing on specific economic factors driving sentiment. Equities in the US managed to recover from the FOMC meeting minutes, with investors responding positively to some solid housing data and a sharp bounce in the Philly Fed manufacturing index. The CPI release was also interesting, coming in ahead of estimates; service prices drove the reading despite goods prices actually falling.

The acceleration in core service prices is logical given the amount of jobs the economy has been generating. Eventually, this will see wages rise as well and support inflation in the medium term, helping the Fed reach its target.

In Europe it was a different story as disappointing PMIs on the manufacturing and services fronts dragged equities lower. This will only mount pressure on the ECB to act and will also keep the single currency under pressure. There will be a couple of key speeches in Europe latertoday. Mario Draghi speaks at the 24^th European Banking Congresstomorrow about Reshaping Europe. German Buba President Weidmann will speak about Banking Union and Regulatory Reforms.

Japan to dissolve lower house

Looking around the region, Japan dissolves its lower house today and will start gearing up for elections. This might mean we see a bit of a cautious tone today, particularly after USD/JPY retreated into the ¥118 region again, down from a high of ¥118.98. We are currently calling the Nikkei down 0.3% at 17260 and it'll be interesting to see how it plays out as politicians are likely to start getting vocal.

Iron ore breaks losing streak

Ahead of the local market open we are calling the ASX 200 marginally firmer at 5320. Iron ore finally snapped its losing streak, which is likely to be the highlight of trade today. This could see some sort of a bounce for the pure plays in particular. Stocks such as AGO, ARI and FMG are all deep in oversold territory and a near-term bounce could take place.

Analysts are also not ruling out consolidation in the sector as declining iron ore prices pressure businesses and reduce prospects of expansion. Consolidation is likely to be the next logical step for some of these miners to survive. Outside of iron ore, Western Areas will be in focus on the back of its first quarter report.

The most shorted stocks in the ASX 100 are MYR, FMG, MTS, JBH and MIN. At some stage these shorts will be closed out and this could lead to an unexpected squeeze in prices. There are also a few AGMs to look out for today including Myer, Billabong, Gindalbie and Perseus.

Asian markets opening call	Price at 8:00am AEDT	Change from the Offical market close	Percentage Change
Australia 200 cash (ASX 200)	5,319.60	3	0.06%
Japan 225 (Nikkei)	17,259.10	-42	-0.24%
Hong Kong HS 50 cash (Hang Seng)	23,294.50	-55	-0.24%
China H-shares cash	10,386.00	7	0.06%
Singapore Blue Chip cash (MSCI Singapore)	374.29	1	0.30%
US and Europe Market Calls	Price at 8:00am AEDT	Change Since Australian Market Close	Percentage Change
WALL STREET (cash) (Dow)	17,722.00	59	0.34%
US 500 (cash) (S&P)	2,054.04	8	0.40%
UK FTSE (cash)	6,684.20	-6	-0.10%
German DAX (cash)	9,492.40	8	0.09%
Futures Markets	Price at 8:00am AEDT	Change Since Australian Market Close	Percentage Change
Dow Jones Futures (December)	17,697.00	65.50	0.37%
S&P Futures (December)	2,052.38	8.50	0.42%
ASX SPI Futures (December)	5,328.50	-7.00	-0.14%
NKY 225 Futures (December)	17,290.00	-77.50	-0.45%
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	$0.8617	0.0020	0.23%
USD/JPY	¥118.195	-0.260	-0.22%
Rio Tinto Plc (London)	£29.29	-0.13	-0.44%
BHP Billiton Plc (London)	£16.38	0.13	0.80%
BHP Billiton Ltd. ADR (US) (AUD)	$32.00	0.06	0.19%
Gold (spot)	$1,194.25	15.89	1.35%
Brent Crude (January)	$79.84	1.58	2.02%
Aluminium (London)	2030.25	10.25	0.51%
Copper (London)	6657.75	-24.75	-0.37%
Nickel (London)	16330	235.00	1.46%
Zinc (London)	2251.75	-5.25	-0.23%
Iron Ore (62%Fe)	$70.97	0.97	1.39%