Despite being a shortened session ahead of the US holiday there was plenty going on, on Wednesday, with markets generally being driven by expectations of lower interest rates ahead because the global growth outlook appears to be slowing. Yields are lower across the board, with the US10Y now at 1.95%, while the German Bund is trading at -0.385%, and the expectation of declining rates has helped drive stocks higher. The US indices again made record highs on Wednesday, with the S+P reaching 3000 for the first time ever. The FX markets were choppy, with the EU majors being steady although Cable remains under pressure because of Brexit, but the US$ was unable to make any headway, being held back by some soft data. The ADP jobs growth came in at 102k, missing expectations of 140K, possibly suggesting another downbeat NFP reading on Friday. The winners in the FX markets on Wednesday were the Aud and Nzd, which made good gains despite the RBA and RBNZ also leaning towards an easing bias, but underpinned on Wednesday by firm commodity prices.
In other markets, Gold has given back some of its strong gains of the previous session, while oil is 1.7% higher despite the lower-than-expected draw in US inventories adding to the possibility of an increase in global supplies. The price was underpinned though by the headline from the previous session that OPEC and its allies, including Russia, had agreed to extend oil supply cuts until March 2020 in a bid to curb supply. Today, the Energy Information Administration (EIA) report showed that crude stockpiles fell by 1.1 million barrels in the week ended June 28, below expectations of a draw of about 2.96 million barrels.
Looking ahead, Thursday is likely to be quiet in the absence of the US markets for the July 4 holiday and a rather thin calendar. The only items on the agenda will be the Retail Sales for both Australia (exp +0.2mm %) and the EU (exp +0.3%mm), otherwise traders will most likely stand aside while waiting on Friday’s Jobs/NFP/Average Hourly Earnings data (exp 3.6%,+158K, +0.3%mm). Have a good day.
Economic data highlights will include:
Thur: US Independence Day, Australian Retail Sales, Swiss CPI, EU Retail Sales.
Market moves, in brief:
FX: DXY 96.78 (+0.04%)
Bonds: US10Y; 1.95% (-1.27%), German 10Y; -0.384% (-4.6%), UK 10Y; 0.693% (-5.02%), Australian 10Y; 1.291% (-3.91%), NZ 10Y; 1.545% (-1.28 %), China 10Y; 3.248% (0.00%)
Stock Indices: DJI; 0.67%, S+P; 0.75%, NASDAQ; 0.77%, EUStoxx50; 0.93%, FTSE100; 0.66%, Shanghai Composite; -0.94%,
Metals: Gold $1408 oz (+0.04%), Silver $15.30 oz (-0.06%), Copper $2.683 lb (+0.71%), Iron Ore $123.15 per tonne (NYMEX) (-0.02%),
Oil: WTI $ 57.37 pb (+1.61%)
|INDICES / COMMODITIES|