Global Markets:
- Asian stock markets: Nikkei down 0.75%, Shanghai Composite up 0.95%, Hang Seng up 1.41%, ASX up 0.60%
- Commodities: Gold at $1327.90 (+0.11%), Silver at $16.575 (+0.03%), WTI Oil at $59.62 (+0.56%), Brent Oil at $62.96 (+0.58%)
- Rates: US 10-year yield at 2.851, UK 10-year yield at 1.609, German 10-year yield at 0.753
News & Data:
- (AUD) NAB Business Confidence 12 vs 10 previous
- (JPY) PPI y/y 2.70% vs 2.70% expected
- (USD) Federal Budget Balance 49.2B vs 50.2B expected
- (CNY) New Loans 2900B vs 2050B expected
- (CNY) M2 Money Supply y/y 8.60% vs 8.20% expected
- (CHF) CPI m/m -0.10% vs -0.10% expected
- Japan Govt Plans To Reappoint BOJ Governor Kuroda
- BitGrail Cryptocurrency Exchange Claims $195 Million Lost to Hackers
Markets Update:
Asian markets continued to rise strongly today, with investors hunting for bargains after last week’s correction. Investors were seen to disregard any concerns of a mounting US fiscal deficit, leading to gains of more than 1% in a number of regions.
The positive sentiment from Monday’s trading in Wall Street also added to the gains, although trading activity was relatively muted. Volumes from China and HK are set to slow throughout the week, with the Lunar New Year holiday coming up this weekend.
Financials on Nikkei opened marginally stronger after Monday’s holiday as higher lending costs were expected to improve margins for banks. However, the index ended the day in negative as there were reports that Abe is confused on who the next BoJ governor should be.
In China, outperformance was led from the front by tech stocks, with the PBoC adding liquidity by MLFs, coming after repeated warnings to officials by market commentators that liquidity shortages need to be monitored. ASX was propped up by the miners, though disappointing earnings dragged some of the large caps. Kiwi dollar and NZX made gains after the opposition leader announced his resignation.
US 10 year Treasury yields were at 2.856%, down from a Monday high of 2.902%, even as the Treasury Department said spending was greater than tax revenue in January. If yields are to hit 3%, it could further increase the market volatility – perhaps triggering further correction.
Upcoming Events:
- 08:15 AM GMT – (CHF) PPI m/m
- 09:30 AM GMT – (GBP) CPI y/y
- 09:30 AM GMT – (GBP) PPI Input m/m
- 09:30 AM GMT – (GBP) RPI y/y
- 01:00 PM GMT – (USD) FOMC Member Mester Speaks
