Tough but positive markets

2 March, 2016

There is a very different tone to markets in March compared to the start of February and January. We saw declines of 2% and around 1.5% respectively in the S&P500, compared to the 2.4% gain seen yesterday, with another positive day anticipated in the wake of the gain seen in Asia (both Japan and China up around 4%). In FX, the yen strengthened at the start of both months (1% January, 2.75% February), in contrast to the weaker tone seen yesterday. Supporting in the background has been the better tone to oil prices. Overnight, data has been supportive, with GDP data in Australian rising 0.6% QoQ; weaker vs. the (upwardly revised) previous quarter of 1.1% and firmer than expected. The Aussie is up by 1.3% so far this month, moving towards the key resistance of 0.7243 (which was touched but not broken today).

Despite the greater risk appetite being displayed in markets, it has to be said that February was not an easy month in any asset class and so far during March, the same seem to be holding true, at least in FX. Sterling was up and down like a yo-yo for most of yesterday’s session, with the same holding true for the Aussie and less so the yen. It creates an impression of a market that is struggling for direction but also trying to grab onto what exactly the key driver is. Even Brexit appears to have fallen from the headlines, at least as far as sterling is concerned, but that is likely to be temporary in my view. The US primaries overnight have seen Trump and Clinton push ahead, but so far markets are not really reacting, not least because we still have 8 months to go in terms of campaigning. There are no major data releases for today likely to rock the tone. So far, comments from ECB President Draghi, noting increased downside risks to the outlook, having not impacted the single currency, given that they largely reflect the data released this week. We’ve also seen Moody’s downgrade the outlook for Chinese government debt. This is not the main rating, more a warning shot and market were unmoved on the news.


Source link  
Markets look to Central Bankers

Asian Equities traded higher on Tuesday approaching near two-year highs on Tuesday as USD strength helped exporters...

Global Economic Optimism Continues

Global equities moved higher on Monday as optimism continued to improve on global economic growth. However, USD...

BOJ Monetary Policy Remains Steady

The Bank of Japan maintained their monetary policy on Friday whilst upgrading their assessment of private consumption...


Final Confirmation for a June Rate Hike

The crucial US labour market data for May will be released today, June 2nd at 13:30 BST. It includes non-farm payrolls...

GBP Under Pressure

The Brexit negotiation process is one of the focuses of the upcoming UK election. Although the Conservative Party has pledged a smooth and orderly...

Oil Slumped Post OPEC Extension

On Thursday, OPEC announced that the existing output cut agreement will be extended for an additional 9 months...


USD Bounces From Month Low

Trump administration has presented its 2018 budget plan to Congress last evening. The budget plan calls to slash $3.6 trillion...

Dollar index hit a new low

The dollar index hit a new post presidential election low of 96.95 on Friday May 19th. EUR/USD hit a high of 1.1211...

USD Hit Post Election Low

To date the dollar index has almost given up all of the post presidential election rally...

  


Share: