Rising bond yields have again been in focus on Tuesday leading to a selloff in the US stock market, with the DJI’s 400-point fall being its steepest in almost 12 months. The US$ has been unable to make any gains however and is trading mixed against the other currency pairs, after a volatile day, although it is a fair bit lower against Sterling in particular. Cable traders are pricing in around 50% chance of a UK rate hike by BoE in May, with the chance for a hike by August now rising to 80% and this has been helped today by some supportive comments on inflation from BOE Governor Mark Carney. In the commodities space, the metals are pretty much unchanged, while WTI is down by around 1.5% as traders sought to unwind some bullish bets amid growing fears that US oil supplies could rise for the first time in eleven-weeks.
Wednesday is likely to be a very active session , beginning with the Australian Private Sector Credit (exp 0.4%mm) and CPI (exp 0.7%mm, 2.0%yy; Trimmed Mean, exp 0.5%mm, 1.9%yy), to be followed by the NBS China Mfg & Non-Mfg PMIs. Europe will look to the German Retail Sales, both the EU and German Unemployment data, and the EU Preliminary CPI (exp 1.3%mm, 1.0%yy) along with a speech from the ECB’s Coeure for guidance,. From the US we get underway with Donald Trump’s State of the Union Speech. This will be followed up by the ADP Jobs data (exp +180k), the December Pending Home Sales (exp 0.3%mm), the Chicago Purchasing Managers Index (exp 64.5) and finally we have Janet Yellen’s final FOMC Meeting at which quite a hawkish outlook is expected. Happy trading.
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|ASX SPI: 5945|