6 Mar: Stocks higher on hopes a trade war will be avoided. Currencies mixed. RBA ahead today.

By | March 6, 2018

 

While the outlook for the US$ remains rather mixed, given the prospect of a trade war, the stock markets have had a firm session on Monday as investors speculated that Donald Trump’s tough tariff talk won’t actually translate into the most severe protectionist policies. Who knows what is going to happen? The other currencies were rather also mixed, with the Euro finding some solid ground despite the Italian election resulting in a hung parliament to be led by the two anti-establishment parties, while Cable headed higher after a decent UK Services PMI was followed up by some improved Brexit headlines. The Yen weakened on hope that the trade war fears may be receding, and was also pulled towards 107.00 by some large option expiries that are coming up today. In other markets, stocks are up by around 1%-1.5%, while WTI has settled sharply higher (+2.25%) after a report of further declines in crude stockpiles at the Cushing storage hub, suggesting that solid domestic economic growth continues to support crude demand. The metals have been rangebound, as have the commodity bloc currencies.

Tuesday’s focus will be on the RBA Meeting, although no change is universally expected and the focus will be on the statement. Also note that the RBA Governor Lowe will be speaking towards the end of the US session/early Australian time tomorrow. Elsewhere it is a rather thin calendar today, with little out of Europe where they will still be digesting the Italian election results, or out of the US where the highlights will be the January Factory Orders and a speech from the Fed’s Dudley. Kiwi traders should note that the Global Dairy Trade Index will be released at around midday UK time. Speeches are also due from the BOE’s Haldane and the Fed’s Dudley.

CURRENCIES
EURUSD: 1.2327
Res  1.2345  1.2365  1.2400
Sup  1.2300  1.2285  1.2265
USDJPY: 106.19
Res  106.35  106.55  106.75
Sup  106.00  105.75  105.35
GBPUSD: 1.3839
Res  1.3875  1.3915  1.3960
Sup  1.3805  1.3765  1.3715
USDCHF: 0.9402
Res  0.9410  0.9425  0.9440
Sup  0.9385  0.9365  0.9350
AUDUSD: 0.7763
Res  0.7770  0.7790  0.7820
Sup  0.7740  0.7725  0.7710
NZDUSD: 0.7224
Res  0.7240  0.7260  0.7280
Sup  0.7200  0.7185  0.7170
INDICES / COMMODITIES
S&P: 2724
Res  2730  2740  2750
Sup  2720  2710  2700
DJI: 24913
Res  24930  25000  25100
Sup  24800  24700  24600
ASX SPI: 5942
Res  5960  5980  6000
Sup  5925  5910  5890
XAUUSD: 1319
Res  1325  1330  1335
Sup  1315  1310  1305
XAGUSD: 16.42
Res  16.55  16.65  16.75
Sup  16.35  16.25  16.15
WTI: 62.66
Res  63.05  63.50  64.20
Sup  62.05  61.50  61.00