Axi | Jan 05, 2018 10:04
Originally published by AxiTrader
Stocks across the globe are stronger again as this early 2008 rally continues with gusto.
As I write all sectors of the S&P 500 are higher save for utilities, which is off just 0.02%, with the gains being led by a 1% gain in financials and basic materials with tech a relative laggard with just a 0.5% gain. I throw that in as an example of how broad based this rally is in terms of sectors at the moment.
And it’s broad based in terms of geographical participation as well.
While the Dow topped 25,000 with a 0.62% gain, the S&P 500 had another 0.4% gain to 2,725, and the Nasdaq 100 rose 0.2% all of Europe and most of Asia (save for Korea) also made very decent gains over the past 24 hours.
That means SPI traders are again betting we’ll see the ASX join the fray. Yesterday’s top at 6101 and reversal was disappointing. But the markets is likely to open higher this morning…and then we’ll see.
On other markets it’s again the story of a weaker US dollar as the fact its data is solid and improving is lost on traders focussed on expectations that EU strength will drive the ECB to chase the Fed, and that synchronised global growth will in fact drag most central banks along the tightening path.
So this morning we have the euro at 1.2067 after running to just below the 2017 high. The pound is higher as well at 1.3547 while – as has become the norm recently – the yen is marching to its own beat and is actually weaker with USD/JPY at 112.78. With a weaker US dollar and surging risk appetite the Aussie and kiwi are higher again with AUD/USD at 0.7858 while the kiwi is at 0.7152 up a very solid 0.87% to lead the G10 pack this morning.
US dollar weakness is again helping gold, which is at $1321 now up 0.63%. Crude is higher again on a big draw in EIA inventories of 7.419 million barrels and residual concerns over Iran. That’s sees WTI at $62.04, +0.67%, while Brent is 0.37% to $68.09. Interestingly amid all this excitement in stocks and a weaker dollar copper, aluminium, zinc, tin, and nickel are all a little lower this week. Copper actually surged at one point overnight but has fallen back and is up just 0.06%.
With solid EU PMI’s and stronger ADP payrolls and still solid US PMI you’d be forgiven for thinking bonds might rise. But overall nominal long rates remain fairly quiet. US 10's are at 2.45% but the curve has flattened to 49 points as 2’s rose to 1.96%.
On the day there is plenty of data to be released with non-farm payrolls the highlight tonight. Locally we have trade data in Australia. Japanese retail sales will be interesting as will German retail sales and construction PMI tonight. Euro Area PPI and flash inflation for December is also very important as are Canadian trade and employment data.
A big end to this incredible first week of trade.
read the story here. Of course what’s interesting about this story is the fiscal rectitude of the Germans at a time when the US profligacy has been writ large by the tax cut which will expand US debt by between $1.5 and $2.0 trillion dollars in the next decade. Maybe this is the real reason why the US dollar can’t take a trick. I’m pretty sure it’s one of them.
Source: Bloomberg
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CNBC reported overnight that Martin Fraenkel, president at S&P Global Platts said “The U.S. is emerging as, not only a military and economic superpower, but as an energy superpower”. He says that by 2020 the US will be one of the “top 10 oil exporters in the world”. This could be very important for not only the global oil order but for geopolitics as well.Something to watch in the quarters and years ahead.
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Have a great day's trading.
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