Global Markets:
- Asian stock markets: Nikkei up 1.04%, Shanghai Composite down 1.15%, Hang Seng down 0.53%, ASX up 0.24%
- Commodities: Gold at $1334.80 (+0.15%), Silver at $16.590 (+0.14%), WTI Oil at $63.88 (-0.05%), Brent Oil at $67.25 (-0.06%)
- Rates: US 10-year yield at 2.857, UK 10-year yield at 1.505, German 10-year yield at 0.657
News & Data:
- (NZD) Trade Balance -566M vs -2710M expected
- (USD) New Home Sales 593K vs 655K expected
- (GBP) High Street Lending 40.1K vs 37.2K expected
- Telltale signs of recession absent as U.S. economic expansion closes in on record
- Credit Suisse thinks the RBA's optimism is creating a problem for the Australian economy
- PBOC set the Yuan reference rate at 6.3146
Markets Update:
Asian markets extended their recovery on Tuesday, following gains on Wall Street overnight. Global equities continued to reverse this month’s major losses. Chinese large caps dragged down the Shanghai Composite and the Hang Seng, with markets slowly reacting to the news of the Communist Party planning to remove term limits on the country’s presidency.
Nikkei is supported by the yen, which has retreated from highs against the dollar. While there was speculation that the BoJ would take a more hawkish stance in the second half of 2018, Kudroa’s re-appointment and the bank’s statements for continued easing has ‘eased’ those concerns. ASX continues to gain, backed by miners whose fortunes have been driven by the rising iron-ore prices. The ASX has now completely erased its February declines.
US borrowing costs eased ahead of Fed Chairman Powell’s first congressional testimony today, also improving investor sentiment. However, it is speculated that he may use the opportunity to hint that a further rate increase is coming at next month’s meeting.
The recent pickup in markets have been aided by a pause in the rising bond yield, although Feds fund rate futures have almost fully priced in a rate hike in March.
Oil prices held firm at three-week highs, supported by strong U.S. demand and comments from Saudi Arabia that it would continue to curb production in line with OPEC-led efforts.
Upcoming Events:
- 08:00 AM GMT – (EUR) Spanish Flash CPI y/y
- 09:00 AM GMT – (EUR) M3 Money Supply y/y
- 10:00 AM GMT – (EUR) German Buba President Weidmann Speaks
- 01:30 PM GMT – (USD) Core Durable Goods Orders m/m
- 01:30 PM GMT – (USD) Fed Chair Powell Testifies
- 01:30 PM GMT – (USD) Durable Goods Orders m/m
- 03:00 PM GMT – (USD) CB Consumer Confidence
- All Day – (EUR) German Prelim CPI m/m
- &more…
