It was all about the stock markets again on Friday as Wall Street tumbled, with traders increasingly nervous about a potential trade war between the US and China, sending the S+P and the DJI down by 2%. In terms of data, almost unnoticed amidst the action going on elsewhere, the US durable goods orders rose 3.1% in February, above expectation of 1.7%, while the ex-transport orders rose 1.2% versus expectation of 0.5%. Unfortunately the good numbers did nothing to help bond yields which finished lower (US 10Y – 2.817%) or the dollar. The currency markets were choppy but largely on the sidelines given the move in the stock-markets, with the US$ ending mixed, but mostly weaker on the day, particularly against the Yen, which looks set for further gains on all fronts this week if the current sour risk sentiment continues to dominate trade. The dollar index (DXY) was down 0.48%, at 89.427 on the day and down 0.9% for the week. Elsewhere, Gold was in demand as safe haven buying set in due to the trade war concerns, rising $20 oz on Friday, while WTI settled at a 2 month high, as the prospect of an extension to OPEC-led production cuts into 2019 overshadowed data showing the number of US oil rigs rose to 804, a three-year high.
This will be a shortened week’s due to Easter although there will be some key data released. The focus will be on the Q4 US GDP (Wed) and the US Personal Consumption/Expenditure (Thur) but also due will plenty of secondary data, with the main interest being on the Preliminary March German CPI (Thur). Asia will be more or less empty. Have a good long w/e.
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