Global Markets:
- Asian stock markets: Nikkei up 0.55%, Shanghai Composite up 0.28%, Hang Seng up 1.37%, ASX up 0.69%
- Commodities: Gold at $1328.30 (+0.05%), Silver at $16.530 (+0.22%), WTI Oil at $61.22 (+0.22%), Brent Oil at $64.39 (+0.08%)
- Rates: US 10-year yield at 2.879, UK 10-year yield at 1.501, German 10-year yield at 0.662
News & Data:
- (CNY) Trade Balance 225B vs -70B expected
- (AUD) Trade Balance 1.06B vs 0.21B expected
- (USD) Crude Oil Inventories 2.4M vs 2.6M expected
- (CAD) Overnight Rate 1.25% vs 1.25% expected
- (CAD) Labor Productivity q/q 0.20% vs 0.10% expected
- (CAD) Trade Balance -1.9B vs -2.5B expected
- (USD) ADP Non-Farm Employment Change 235K vs 199K expected
- (GBP) Halifax HPI m/m 0.40% vs 0.40% expected
- China Warns of 'Justified and Necessary Response' to Trade War
- Further fall in UK housing stock as demand also falls for the eleventh month
Markets Update:
Asian markets traded higher today, after risk sentiment improved, as suggestions of carve-outs for key partners hit the news. House Republicans continue to lobby the White House to drop the tariffs – whose announcement is expected this week. That said, investors continue to worry that the U.S. tariff could trigger a trade war, shrink the global trade, and eventually squeeze corporate profits that have so far benefited from strong global growth.
Canada and Mexico have been granted a 30 day exemption, which may be extended basis the NAFTA discussions – underlining speculation that the tariffs may be posturing for the US to negotiate more beneficial NAFTA terms.
Markets are in anticipation of minutes of today’s ECB meeting, on whether the central bank will change its forward guidance on QE. Nikkei has been trading in the green, after a larger than expected upward revision in GDP. Power Generation has been outperforming in China following announcements that China will cut industry oversupply. ASX has also been trading higher after a larger than expected trade surplus.
The dollar stabilized against most currencies, partly due to announcements that key allies like Canada and Mexico would be exempt from the tariff. The euro has been trading largely flat, all eyes on the ECB meeting later in the day.
Bitcoin took a beating as US and Japanese regulators cracked down on cryptocurrencies. In a consumer protection move, Japanese regulators whipped seven exchanges, shutting down two of them. The SEC on the other hand, said that exchanges should be registered with them and subject to additional rules.
Upcoming Events:
- 12:45 PM GMT – (EUR) Minimum Bid Rate
- 01:30 PM GMT – (CAD) Building Permits m/m
- 01:30 PM GMT – (CAD) NHPI m/m
- 01:30 PM GMT – (EUR) ECB Press Conference
- 01:30 PM GMT – (USD) Unemployment Claims
- 04:00 PM GMT – (CAD) BOC Gov Poloz Speaks
- 08:35 PM GMT – (CAD) Gov Council Member Lane Speaks
