US stockmarkets climbed to new record highs on Monday, ahead of the start of the Q4 corporate reporting season which begins in earnest later today, while also being underpinned by growing enthusiasm towards the signing of a partial US/China trade deal, which is due to take place on Wednesday.
The FX markets were relatively benign although the Jpy is weaker as safe- haven demand diminished, while Sterling was heavy after a growing number of BOE officials begin to lean towards voting for a UK rate cut this month. The UK GDP dropped -0.3% mm in November, well below expectation of 0.0% and further tests for Sterling will be seen later this week when the UK CPI and retail sales are released. Otherwise the FX markets were fairly rangebound although the Euro received some support because the German 10Y bund yield headed for least negative closing level since May (-0.160%).
The main moves of the day were again seen in Gold (-0.75%) and Oil (WTI;-1.9%) as tensions continue to ease in the Middle East, while base metals moved in the opposite direction, as hopes for a positive trade outcome underpin prices (Iron Ore +0.5%, Copper +1.57%).
The coming session will begin with the NZ Q4 Business Confidence and the November Building Permits, which will be closely followed by the Japan Eco Watchers Survey, Current Account and Trade Balance and the China Trade Balance for December (exp +US$48 bio, Export +3%, Imports +9.6%). Europe is taking the day off, with no major release at all from the EU/UK but things will warm up in the US session when the December CPI is due (exp 0.2%mm, 2.0%yy). The US Monthly Budget Statement will also be released, while the Fed’s Williams will be speaking.
In the reporting calendar, results will today be seen from Citigroup, JP Morgan, Wells Fargo, Delta Air and United Air, amongst many others. Have a good day.
Economic data highlights will include:
Tue: NZIER Business Confidence, Building Permits, Japan Eco Watchers Survey, Current Account, Trade Balance, China Trade Balance, US NFIB Business Optimism Index, CPI, Monthly Budget Statement, API Weekly Crude Oil Stock Inventory
Market moves, in brief:
FX: DXY 97.34 (-0.01%)
Bonds: US10Y; 1.847% (+1.49%), German 10Y; -0.160% (+31.75%), UK 10Y; +0.776% (+12.50%), Australian 10Y; +1.215% (-4.08%), NZ 10Y; 1.476% (-1.15 %), China 10Y; 3.120% (+0.16%)
Stock Indices: DJI; +0.20%, S+P;+ 0.55%, NASDAQ; +0.88%, EUStoxx50; -0.26%, FTSE100; +0.39%, Shanghai Composite; +0.75%,
Metals: Gold $1550 oz (-0.78%), Silver $18.00 oz (-0.66%), Copper $2.8595 lb (+1.63%), Iron Ore $94.03 per tonne (NYMEX) (+0.50%),
Oil: WTI $58.05 pb (-1.88%)
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