Good data, good mood, plus some surprises

4 January, 2017

What can go wrong when the day starts with a surprisingly strong Chinese manufacturing PMI - especially ata moment when it s failure to meet expectations could have caused severe deterioration of global sentiment? With the US and other important markets re-opening only today after the New Year break the whole lot of strong business sentiment measures had to be discounted and this led to gains in Asia and the US, with mixed performance in Europe after the gains observed yesterday.

Chinese PMI for the manufactruing sector was a highly awaited one given what happened a year ago when fears about destabilization of China sent equities sharply down across the globe. Instead of a collapse the markets saw China Caixin PMI marking its fastest rate of improvement in three years. AUD and NZD jumped to the lead at first being highly dependant on Chinese economic performance. AUD was additionally strengthened by its local sentiment indicator for the manufacturing sector, while the kiwi was lagging behind most likely preparing for weaker results of the milk auction.

The US dollar started its intensive rebound around 7 am. Due to this EURUSD pared gains in the morning at about the time when weak preliminary December inflation data from France was released (+0.3% MoM vs. 0.5% expected). Germany also had a flash release later during the day and strong regional outcomes prepared the market for the push of HICP from 0.7% YoY to 1.7% that followed. Eurozone preliminary data for December will get published at 10am tomorrow. The surge of German CPI did not prevent EURUSD from hitting 1.035. It was only after the very positive (!) set of figures from the US that the pair started to move higher.

The oil market trading was also back today and at first the confirmation of output cuts by Kuwait and Oman helped to lift the price, but the later news included Iraq signalling that Kurds are exporting more than was agreed. The strange reaction of USD to strong US data (ISM manufacturing data beat both the forecast and prior reading in coming in at 54.7, accompanied by strong construction spending) has also seen a sudden drop of oil price (and due to this the commodity is down 2% today despite solid gains in the first half of the day) and gold getting more expensive. Platinum price started to move higher even before the surprising USD pullback.


Source link  
Oil remains elevated, US production keeps rising

Baker Hughes report for the last week has showed another rise of US oil producers activity. The number of active rig counts rose by 8 w/w which obviously favours the further rebound of supply on the market...

DAX reached the nearest resistance

European stocks are trading higher today due to a general risk-on triggered by Donald Trump. He commented on deregulation and corporate tax cuts and commited to introducing a plan in 2-3 weeks which was more than enough for US stocks to surge towards new record highs...

DAX struggling to deny that it is caught by bearish channel

The sentiment on European equities is very cautious, but the main indices remain slightly above zero today. The Dax made an attempt in the morning to shake off its recent weakness, but upward move faded within one hour...


Deutsche with shorts on EURCHF

Bank remains short EURCHF targeting 1.02, Deutsche says that if speculators also upped the pressure, continued intervention would become ever costlier...

DAX - a volatile start of the week

The DAX started the week with a fall of 100 points that was quickly corrected. Currently the index a bit higher on the day and the first drop should be associeted with the political news...

Stocks begin the week on the back foot

Stock markets have started out in a defensive mode this morning with the FTSE 100 falling more than 60 points. Donald Trump is in the headlines once more as his latest executive order signed late on Friday has caused a furore around the globe...


USD back on track

The overnight trading results in a continuation of the US dollar gains. A broad based recovery of the US currency is what has been missing yesterday morning to call the market behavior a proper return of the Trump trade...

UK GDP grows faster than forecast

This morning saw the release of data which shows that the UK economy grew faster than expected in the final quarter of 2016. The pound is higher on the day but has seen some weakness since the release, perhaps due to some traders seeing this as a good opportunity to book some profits after a strong run higher in the past couple of weeks...

A small sell-off on Oil after API

After a closing bell on Wall Street, API issued a weekly report on Crude Oil inventories in the US. The report is pretty bearish for oil. Inventories rose by 2.93mln bbl with expectations at 2.5mln. If the data is confirmed it will be the 3 consecutive week of growth...

  


Share: