Wall Street’s record run looked set for a pause yesterday as oil saw its first fall in five days and the euro held most of the wild three-cent gains it had seen in the wake of Italy’s referendum.
Futures prices pointed little progress for US markets following Monday’s record finish on the Dow Jones despite a second day of European gains and the strongest session for Asia’s bourses in two weeks.
Italy remained squarely in focus, with sources telling Reuters that state aid had been prepared for the world’s oldest bank, Banca Monte dei Paschi di Siena and a crucial European Central Bank meeting looming tomorrow.
Italian shares jumped as much as 1.5 per cent and its bond yields eased back to below pre-referendum levels, while the euro was at $1.0750, knocked just a touch by talk of a snap Italian election.
“I forecast there will be the will to go to elections in February,” Interior Minister Angelino Alfano, the head of a small centre-right party that is a crucial part of Renzi’s ruling coalition, told an Italian newspaper.
Shares had earlier been impressed by news that German industrial orders rose at their fastest pace for more than two years, stoking hopes that Europe’s largest economy is set for an acceleration in the coming months.
Factories saw demand climb 4.9 per cent on the month despite bulk orders being lower than usual, the German economy ministry said.
That was the biggest increase since July 2014 and far above the Reuters consensus forecast of a 0.6 per cent rise.
Data for all the world’s major economies have been delivering positive surprises in recent weeks.
“The reading was very strong even without large-scale orders and that suggests it’s more than just a flash in the pan,” BayernLB economist Stefan Kipar said of the German data, noting that some firms might have brought orders forward.
Oil prices snapped a four-day winning streak as data showed crude output rose in virtually every major export region and it emerged that Saudi Aramco had cut its prices for next month to its big Asian customers.
It jarred with last week’s first Opec agreement since 2008 to cut output and sent Brent oil futures down 20 cents to $54.75 a barrel and US crude down to $51.45.