It was mostly about stocks on Monday, with the DJI at one stage falling over 700 points as traders feared the increased chances of an all out trade war after China retaliated with their own tariffs on US goods, by up to 25% on 128 US products. Investors also fled technology stocks amid re-surging trade worries, sending both the S&P and the DJI below their 200-day moving averages for the first time since the Brexit vote in June 2016.
The US$ saw a sharp fall in US$Jpy on safe haven grounds, but elsewhere is generally fairly steady after some brief support on much stronger than expected ISM prices paid although the impact quickly faded. The ISM manufacturing index rose dropped to 59.3 in March, down from 60.8 and was slightly below expectation of 60.0. The prices-paid component though, surged to 78.1, up from 74.2, beating expectation of 72.5. The Employment component dropped to 57.3, down from 59.7. The Aud$ remains heavy ahead of today’s RBA Meeting. In the commodities markets, Gold prices rose sharply, by $20 as escalating U.S.-China trade war tensions stoked safe-haven demand, while WTI fell almost 3% as escalating trade war fears prompted traders to cut long positions, offsetting recent data pointing to possible tightening in domestic output.
Although a shortened week, it is still going to be a busy one, with the US employment numbers due on Friday, where the market will once again be looking towards the NFP (exp+198k) and more importantly for any sign of inflation growth through the Average Hourly Earnings which so far have failed to give any hint of moving higher, reining in thoughts of how many more times the Fed might actually be able to hike rates this year. Elsewhere the main event will be today’s RBA Meeting, although no change to policy is expected, with the focus to be on the wording of the statement. Other events that traders will be watching will be the PMIs, mostly to be released today and Thursday, the March EU CPI and the US ADP Jobs data (Wed) and the ECB Minutes (Thur). There will be various Central Bank speakers through the week but all the focus though will be on Friday’s jobs data, and until then it could remain choppy and predominantly sideways.
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|ASX SPI: 5746|