Global Markets:
- Asian stock markets: Nikkei up 0.15%, Shanghai Composite down 1.73%, Hang Seng down 0.45%, ASX up 0.75%
- Commodities: Gold at $1332.10 (+0.20%), Silver at $16.685 (+0.63%), WTI Oil at $63.80 (+0.65%), Brent Oil at $67.36 (+0.75%)
- Rates: US 10-year yield at 2.773, UK 10-year yield at 1.522, German 10-year yield at 0.696
News & Data:
- (NZD) Unemployment Rate 4.50% vs 4.70% expected
- (NZD) Employment Change q/q 0.50% vs 0.40% expected
- (CAD) Ivey PMI 55.2 vs 60.7 expected
- (NZD) GDT Price Index 5.90% vs 4.90% previous
- (CAD) Trade Balance -3.2B vs -2.3B expected
- Link between employment and wages broken: Bullard
Markets Update:
Asian markets rebounded after the Wall Street’s rebound yesterday. While trading was quite volatile yesterday, US equities have gained the most in a day since Jan-16, after record sell-offs for two days that brought the Dow crashing by more than 1000 points on Monday.
Global growth, earnings growth and tax reform helped shore up sentiment and accentuate the buying of the dip. Nikkei was outperforming today, after having the worst trading day in a decade. However, PBoC skipped OMOs again, adding to the Chinese markets’ duress by draining liquidity. Hang Seng bounced earlier in the session with energy producers leading the charge amid oil price strength, but has since given away its profits. Gains in mining, energy and financial stocks all lead the Australian stock market higher.
However, the increased volatility killed most volatility traders – the short volatility trade was a popular theme through 2016. Inverse VIX products were under duress, and Credit Suisse decided to shut down its Inverse VIX ETF, after it lost more than 80% in value.
Dollar has been steady against the majors, JPY is off of highs. Gold has been largely flat, while Industrial metals have been weaker. Dollar Index touched resistance level on the 3 day candles near 90 yesterday as had been expected. It is currently below that resistance but could well test it again in this week.
Upcoming Events:
- 08:30 AM GMT – (GBP) Halifax HPI m/m
- 01:30 PM GMT – (CAD) Building Permits m/m
- 01:30 PM GMT – (USD) FOMC Member Dudley Speaks
- 03:30 PM GMT – (USD) Crude Oil Inventories
- 08:00 PM GMT – (NZD) RBNZ Monetary Policy Statement
- 08:00 PM GMT – (NZD) RBNZ Rate Statement
- 08:00 PM GMT – (NZD) Official Cash Rate
- 09:00 PM GMT – (NZD) RBNZ Press Conference
- 10:20 PM GMT – (USD) FOMC Member Williams Speaks
