Forex Market Overview
It is relatively a busy day starting with the series of Chinese economic events especially the GDP data. Besides that, we also got another round of fresh market drivers to inspire strong moves in either direction.
Global Stocks Surged Over China GDP Growth
Global markets experienced another steady trading day yesterday with the majority of stock markets closing the day in the black. The US markets probably had the worst of it as another mixed bag of earnings reports weighed on the indices.
The S&P500 closing close to flat with the Dow and Nasdaq up 0.26% and 0.3% respectively.
Risk on Sentiment Underpins the Dollar Index
FX volatility picked up a touch with the dollar gaining ground against most of the majors, the Dxy back up to just south of 97.10 this morning. It’s evident that anyone looking to invest in the US stock markets will buy the US dollar to pay for it. Eventually, it supports the demand for the US dollar.
Stronger Dollar Presses Commodities
Oil came back slightly better bid on the day with WTI now again around $64.4 and Brent at $71.7. Gold steadied around a 4-month trough on Wednesday, after falling nearly 1% in the previous session due to a surge in global equities, while a stronger dollar piled pressure on the metal. Gold once again sliding now sitting just above key fibo support at 1275.
New Zealand’s Inflation Trigger a Massive Move
We saw a much worse than expected print on NZ CPI this morning, the QoQ data coming out 0.1% vs. exp 0.3% and the YoY at 1.5% vs. exp 1.7%, not surprisingly the kiwi dropped sharply on the release from 0.6770 to 0.6670 before recovering to the 0.6700 level.
This will increase pressure on the RBNZ to cut interest rates sooner than expected, and they may well now be the first of the developed world’s Central Banks to cut rates in the coming months, perhaps as soon as May.
Looking ahead to today’s trading and the primary focus of the Asian session was the Chinese data releases. GDP data which has an uncanny ability to come out on or close to expectation is set to show further slowing of the economy in Q1 although investors are hoping that this could be a base as domestic stimulus starts to kick in and leads to a better growth story later in the year.
Later in the day, the focus will move to the UK with the latest CPI data due out there as well as any Brexit updates, BOE Governor Carney is also set to speak later in the day.
Top EPS Reports Today
- ASML ADR (ASML)
- Abbott Labs (ABT)
- Bank of NY Mellon (BK)
- Crown Castle (CCI)
- E-TRADE (ETFC)
- Kansas City Southern (KSU)
- Kinder Morgan (KMI)
- Morgan Stanley (MS)
- Pentair (PNR)
- PepsiCo (PEP)
- SL Green (SLG)
- Textron (TXT)
- Torchmark (TMK)
- US Bancorp (USB)
- United Rentals (URI)
On the New York open, the focus will move swiftly north of the border with the release of CPI numbers in Canada, however, expect earnings reports to once again dominate the session with little else due out on the calendar.
All the best!