The US$ is mildly firmer, while stock markets fell for a second day and Treasury yields climbed as traders disseminated the Fed’s latest policy decision, and traders now await today’s jobs report and any further news on trade talks, as also not helping stocks on Thursday was a report that the US/China trade talks are at an impasse. Oil also had a tough session, falling by 4% at one stage, with the trade talks not helping, but with the real market focus being on the EIA report, which showed a completely unexpected inventory rise of 9.9 million barrels for the week, against an expected a rise of only 1.5 million barrels.
In terms of data, the BOE voted unanimously to leave rates unchanged at 0.75% and the asset purchase program at 435B pound. The Bank also delivered a slightly more hawkish tone as Brexit has been delayed until October 31, temporarily lowering the risk of no-deal Brexit. The statement suggested that the UK’s economic outlook is a little more positive, with the economy now expected to expand by +0.5% in 1Q 2019, up from +0.2% in 4Q 2018, with further GDP growth expected through 2019/20.
Looking ahead, Friday will begin with the Australian AIG Performance of Services Index for April, but Asia will otherwise see an empty calendar. The EU will have just the Preliminary April CPI (CPI, exp, 1.6%yy; PPI, exp 3.1%yy), and if price pressures ease, we could see an early breakdown in the Euro, but while the main action of the day will come later when the US jobs data is released; (exp; Headline Rate; 3.8% / NFP; +180k / Average Hourly Earnings +0.3%mm, +3.4%yy / Average Weekly Hours 34.5). Also due will be the February Wholesale Inventories, the Markit Services/Composite PMIs and the ISM Non-Mfg PMI (exp 57.2) Have a good weekend.
Economic data highlights will include:
Fri: Australian AIG Performance of Services Index, Building Permits, EU Preliminary CPI, US Jobs/NFP/Average Hourly Earnings data, Wholesale Inventories, Services/Composite PMIs, ISM Non-Mfg PMI.
Market moves, in brief:
FX: DXY 97.83 (+0.22%)
Bonds: US10Y; 2.547% (+1.58%), German 10Y; +0.03% (+119.0%), UK 10Y; 1.189% (+3.45%), Australian 10Y; 1.794% (+0.20%), NZ 10Y; 1.885% (+1.34 %), China 10Y; 3.40% (0.0%)
Stock Indices: DJI; -0.46%, S+P; -0.21%, NASDAQ; -0.16%, EUStoxx50; -0.73%, FTSE100; -0.46%, Shanghai Composite; +0.52%,
Metals: Gold $1271 oz (-0.46%), Silver $14.63 oz (-0.29%), Copper $2.785 lb (-0.22%), Iron Ore $93.60 per tonne (NYMEX) (-.005%),
Oil: WTI $61.63 pb (-3.07%)
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