It has been a volatile session on Tuesday, with the main theme being that of a mild US$ recovery and a sharp 1%-1.5% sell off in US stocks (DJI/S+P), as Q1 flows – in terms of long w/e position squaring/profit taking – dominate the action. The NASDAQ is down around 3%. The Euro, Sterling and Aud$ in particular took a hit in Europe/US trade although no particular catalyst was apparent, and both the Euro and Sterling (but not the Aud$) have since seen a partial recovery as US bond yields came off quite sharply, with the US 10 year currently at 2.77%, under 2.8% for the first time in 6 weeks. Earlier in the day, Sterling was pressured by some demand for EurGbp and some M/A supply following the announcement of the deal between GSK/Novartis. In the commodities markets, Gold headed lower on the back of the dollar strength after fears of a global trade war moderated amid ongoing China-U.S. dialogue on trade. WTI also settled lower as traders waited for the EIA Crude Oil Stocks Weekly Change, coming up shortly, which are expected to show U.S. crude stockpiles resumed their expansion amid an ongoing ramp up in domestic output.
Wednesday will kick off with the NZ ANZ Activity Outlook and Business Confidence for March although there is nothing else to come from Asia and then very little from Europe either. The main focus of the day is going to be on the US Q4 GDP (exp 2.6% annualised), Goods Trade Balance (exp -$72.5bio), and Personal Consumption/Expenditure (exp 2.9% – Prices, 2.0% – Expenditure). Also coming from the US will be the Pending Home Sales for Feb (exp +0.5% mm, -0.2%yy), February Provisional Wholesale Inventories (exp 0.2%mm) and a speech from FOMC member, Bostic, late in the day. Have a good day.
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|ASX SPI: 5761|