Thursday 5th March: IMF, WB packages lend confidence to markets

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Global Markets:

  • Asian Stock Markets : Nikkei up 1.09%, Shanghai Composite up 1.99%, Hang Seng up 1.85%, ASX up 1.11%
  • Commodities : Gold at $1642.35 (-0.04%), Silver at $17.23 (-0.12%), Brent Oil at $51.67 (+1.06%), WTI Oil at $47.20 (+0.90%)
  • Rates : US 10-year yield at 1.012, UK 10-year yield at 0.367, Germany 10-year yield at -0.624

News & Data:

  • (AUD) Trade Balance 5.21B vs 4.80B expected
  • (USD) Crude Oil Inventories 0.8M vs 2.8M expected
  • (USD) ISM Non-Manufacturing PMI 57.3 vs 54.9 expected
  • (CAD) Overnight Rate 1.25% vs 1.25% expected
  • (USD) ADP Non-Farm Employment Change 183K vs 170K expected
  • (GBP) Final Services PMI 53.2 vs 53.2 expected
  • Yuan Recoups All Losses Since Virus Outbreak First Shut Economy
  • New BoE boss Bailey does not back immediate virus rate cut

Markets Update:

Asian stock markets are mostly higher on Thursday following the overnight rebound on Wall Street after former U.S. Vice President Joe Biden’s strong performance in the Super Tuesday contests. Investor sentiment was also boosted following measures being taken by global central banks to deal with the economic impact of the coronavirus outbreak. Overnight, the Bank of Canada cut interest rates by 50 basis points, following rate cuts by the Federal Reserve and the Reserve Bank of Australia earlier. Meanwhile, the IMF announced a $50 billion aid package for low income and emerging markets countries to combat the coronavirus outbreak. Earlier, the World Bank announced an emergency package of $12 billion.

Stocks in mainland China were among the biggest gainers by the afternoon, with the Shanghai composite and the Shenzhen component both up by 2%. Shares in Australia also rose as the S&P/ASX 200 jumped 1.1%, with shares of CSL surging 3%. In Japan, the Nikkei 225 added 1.1% while the Topix index also traded 0.9% higher. South Korea’s Kospi added 1.3% as shares of LG Chem soared about 3%.

Oil prices rebounded by more than 1% on a smaller-than-expected rise in crude oil inventories in the United States. Gold steadied after jumping in the wake of the Fed’s rate cut, and was last at $1642.4. The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 97.344 after seeing an earlier low of 97.326.

Upcoming Events:

  • All Day – (All) OPEC Meetings
  • 05:00 PM GMT – (GBP) BOE Gov Carney Speaks
  • 05:45 PM GMT – (CAD) BOC Gov Poloz Speaks
  • 11:30 PM GMT – (USD) FOMC Member Kaplan Speaks