BT Three Minute Markets Update

Expect another good start today - we've had nine in a row - with overseas markets all strong: FTSE +0.7%,DAX +0.2%, S&P and Dow +0.5%.

Not much movement on Monday: FTSE +0.2%, DAX -0.3%, Dow ended its up streak, -0.1%, S&P -0.2% but stayed about 1500.

S&P up to 1502, highest since 2007, FTSE +0.8%, AUD fell to USD1.045; warning for investors with Apple's reporting lowered revenue.

Federal Housing Finance Agency's November Home Price Index +0.6% for the month, matching consensus.

December's existing home sales release recorded a one percent decline in sales volume, with Consensus calling for an up one percent figure. So with this December publication out of the way and putting things into some semblance of perspective, on the Quarterly Metric, quarter four sales were at 4.9 million units annualised and quarter three were at 4.66 million and quarter two at 4.54 million.

There was no new data releases for Monday 21 January.

The January release of the University of Michigan's Index of Consumer Sentiment was supposed to print a 75.0, a strong rebound from December's 72.9. The driver for this forecast January up tick being essentially two things, relief over the last minute fiscal cliff agreement and the ensuing equity market rally.

US initial jobless claims declined by 37,000 to 335,000, well below the 369,000 consensus; housing starts increased to a seasonally adjusted annualised rate of 954,000 in December, beating consensus' bullish 890,000 and a 12.1% increase from November's print.

US December industrial production +0.3%, matching consensus despite the dampner of the fiscal cliff, now highest since June 2008. December's manufacturing +2.4% annualised, again despite the fiscal cliff. Inflation comfortably below the Fed's 2% target and right on their projection.

US December retail sales an encouraging +0.5% (consensus +0.2%); November's were also revised up to +0.4% from +0.3%. December PPI -0.2%, consensus -0.1%, due to falling energy prices. January Empire State Manufacturing index consensus flat, actual -7.78%

Markets remained cautious, awaiting the US Fed president's speech on monetary policy, although the AUD and European bonds were higher.

November trade deficit $48.7bn - widest since April and the largest one-month increase since Jan 2011: up 16%; consensus expecting $41.3bn after October's $42.1bn. December import price index -0.1% with concensus expecting +0.1%, annualised figure an encouraging -1.5%.

Initial jobless claims for Jan 5 increased slightly, contrary to the expected slight decline. November Wholesale inventories +0.6%, triple 0.2% consensus; offset by the October revision but the fifth consecutive increase.

November consumer credit expected to fall to $12.7bn from October's $14.1bn but actual came in at $16bn with borrowing accelerating, especially in student loans and car finance.

US December NFIB optimism index not exactly overflowing with optimism at 88.0, above the 87.2 concensus but still the 2nd lowest print since March 2010; probably driven by the fiscal cliff empasse.