Risk aversion eased a little on Tuesday as traders took heart from the US decision to delay the sanctions of Huawei for 90 days, with the stockmarkets ending the session +0.8%/+1.0%, taking US yields and US$Jpy along for the ride as demand for as safe haven diminished. Otherwise markets have generally been fairly rangebound and confined to a tight range. The Aud$ and the Kiwi have so far held on to their recent lows but look heavy, as does Sterling, which is struggling to hold on to 1.2700 amid growing fears that UK PM Theresa May will fail to persuade her colleagues to back the latest version of her Brexit withdrawal deal.
Elsewhere, the metals have done nothing and WTI is down by around 0.3% on the day, but remains within its recent range.
Wednesday will start off with the Q1 NZ Retail Sales (exp 0.0%qq, Ex-Autos; +0.9%) Australian WBC Leading Index and the Q1 Construction Work Done in an otherwise quiet Asian session although, note that the Fed’s Bullard will be talking during the late Asian afternoon. Europe will also be threadbare in terms of data, with just the UK CPI to provide any guidance although Mario Draghi will be speaking and may add some volatility to the Euro. The main event of the session will be the FOMC Minutes, which seem likely to maintain the status quo and to continue the Fed mantra that the next interest rate move, either up or down, will be data dependent, as they continue to sit on their hands for now.
Economic data highlights will include:
Wed: NZ Retail Sales, Australian WBC Leading Index, Q1 Construction Work Done, Fed’s Bullard Speech, ECB Mario Draghi Speech, UK CPI, PPI, RPI, US Mortgage Approvals, FOMC Minutes, EIA Crude Oil Stocks Weekly Change
Market moves, in brief:
FX: DXY 98.03 (+0.10%)
Bonds: US10Y; 2.429% (+0.37%), German 10Y; -0.063% (+28.21%), UK 10Y; 1.085% (+2.01%), Australian 10Y; 1.645% (-2.45%), NZ 10Y; 1.805% (-0.82 %), China 10Y; 3.310% (+0.88%)
Stock Indices: DJI; +0.77%, S+P; +0.85%, NASDAQ; +1.08%, EUStoxx50; +0.50%, FTSE100; +0.25%, Shanghai Composite; +1.23%,
Metals: Gold $1275 oz (-0.2%), Silver $14.45 oz (-0.10%), Copper $2.7140 lb (-0.55%), Iron Ore $96.56 per tonne (NYMEX) (+0.20%),
Oil: WTI $ 62.95 pb (-0.33%)
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