Global Markets:
- Asian stock markets: Nikkei down 1.58%, Shanghai Composite up 0.12%, Hang Seng down 0.27%, ASX down 0.71%
- Commodities: Gold at $1314.40 (-0.27%), Silver at $16.250 (-0.45%), WTI Oil at $61.66 (+0.03%), Brent Oil at $64.68 (-0.08%)
- Rates: US 10-year yield at 2.866, UK 10-year yield at 1.507, German 10-year yield at 0.655
News & Data:
- (CNY) Caixin Manufacturing PMI 51.6 vs 51.3 expected
- (AUD) Private Capital Expenditure q/q -0.20% vs 1.00% expected
- (USD) Crude Oil Inventories 3.0M vs 2.4M expected
- (USD) Pending Home Sales m/m -4.70% vs 0.40% expected
- (USD) Chicago PMI 61.9 vs 64.2 expected
- (USD) Prelim GDP q/q 2.50% vs 2.50% expected
- (CAD) RMPI m/m 3.30% vs 1.80% expected
- (EUR) Core CPI Flash Estimate y/y 1.00% vs 1.00% expected
- (EUR) CPI Flash Estimate y/y 1.20% vs 1.20% expected
- (CHF) Credit Suisse Economic Expectations 25.8 vs 34.5 previous
- (CHF) KOF Economic Barometer 108 vs 106.2 expected
- Trump Likely to Impose Stiff Steel, Aluminum Tariffs
- US amenable to trade talks with Japan, 4 other TPP members: USTR
Markets Update:
Asian markets traded lower on Thursday, after Powell’s hawkish Q&A brought back concerns of further rate hikes, sending risk asset markets spiralling down. His remarks to the Senate Banking Committee on Thursday will hopefully provide more clarity on what the Fed has in store.
Nikkei has been trading lower today. The JGB curve continues to flattening, as Kudroa continues to press upon the need for continued easing. Caixin PMI helped ease concerns of a slowing Chinese manufacturing sector, and led the markets to higher territories. ASX has been weaker today, with banks under pressure from the lower rates, and miners from the stronger dollar.
The dollar continues to be bought, supported by comments from Powell. The dollar index rose to its highest since 19th January. As usual, safe haven JPY continues to strengthen against the dollar. The Euro has had perils of its own, with the euro-zone inflation slowing to a 14 month low, signalling that the ECB’s caution in removing stimulus is warranted.
Commodities have mostly steadied, with copper and oil off overnight lows. However, the stronger dollar continues to pose a threat to commodity markets. On the bright side, the strengthened dollar, and consequently cheaper oil, may cause a slowdown in US inflation, and thus slowing down the rate hikes.
Upcoming Events:
- 09:30 AM GMT – (GBP) Manufacturing PMI
- 09:30 AM GMT – (GBP) Net Lending to Individuals m/m
- 01:30 PM GMT – (CAD) Current Account
- 01:30 PM GMT – (USD) Core PCE Price Index m/m
- 01:30 PM GMT – (USD) Personal Spending m/m
- 01:30 PM GMT – (USD) Unemployment Claims
- 03:00 PM GMT – (USD) Fed Chair Powell Testifies
- 03:00 PM GMT – (USD) ISM Manufacturing PMI
- &more…
