Of the US blue chips, Boeing was the session’s stand-out stock. It’s share price rallied by over 2 per cent last night, taking its recent run off the multi-year lows it registered in January, to above 11 per cent.
3. ASX set to jump at the open: The positive lead from Wall Street is setting up the ASX200 for a 29-point jump at the open this morning, after yesterday’s modest -0.14 per cent sell-off. The losses were headed once again by weakness in commodity sensitive stocks, with the energy and materials sector shedding 0.93 and 0.56 per cent respectively.
At the other end of the market, consumer stocks lead the market yesterday, in part due to JB Hi-Fi’s 11.5 per cent spike, after that company soundly beat earnings estimates yesterday.
4. Safe-havens outperform growth proxies: Outside equity markets, and traders preference for safe havens, and antipathy towards growth sensitive assets, was more apparent. Sovereign bond yields dropped globally, with the US 10 Year Treasury yield falling 4 points to 1.55 per cent.
Commodity prices were broadly lower. Oil prices fell, taking the price of WTI below $US50, while copper also sustained losses in excess of 1 per cent. Courtesy of lower yields and greater pessimism about global growth, gold prices edged another 1.4 per cent higher.
5. Safety in G10 FX sort after: Safe haven currencies also benefited from the market’s growing fears about global economic growth. The Japanese Yen proved the G10 outperformer, rallying at the expense of growth sensitive currencies like the AUD/USD, which is trading back below 67 cents.
The US Dollar also edged higher, courtesy of a broad-based drop in the Euro, following news Angela Merkel’s planned successor to Germany’s Chancellorship, Annegret Kramp-Karrenbauer, announced she would not be running as her party’s candidate for the position.
6. Chinese CPI hits multi-year highs: Chinese inflation numbers topped the data-docket on Monday. CPI was shown to have leapt last month in China’s economy to 5.4 per cent – the measures highest rate of growth since 2011.
Attributed to the transient effects of Chinese Lunar New Year on demand, as well as a touch of the effects of the coronavirus, the data illustrated to market participants the potential inflation-risks presented to Chinese policymakers, as they attempt to stimulate China’s economy through the coronavirus outbreak.
7. The big stories in the day ahead: The economic calendar will be highlighted by a slew of central bank speeches, as well as a major data-dump out of the UK today. The market will be perusing the language of central bankers, for clues that policymakers are prepared to provide monetary policy support to combat the impacts of coronavirus.
While the market will be looking to UK for signs of sustained weakness in the UK economic activity, to judge the likelihood of an imminent Bank of England rate cut.
8. Market watch:
ASX futures up 41 points or 0.6% to 6986 near 7.45am AEDT
- AUD +0.1% to 66.80 US cents
- On Wall St near 3.30pm: Dow +0.4% S&P 500 +0.5% Nasdaq +0.9%
- In New York: BHP -0.3% Rio -0.7% Atlassian +2.7%
- In Europe: Stoxx 50 -0.1% FTSE -0.3% CAC -0.2% DAX -0.2%
- Nikkei 225 futures +0.1%
- Spot gold +0.3% to $US1575.39 /oz at 1.12pm New York
- Brent crude -2.1% to $US53.31 a barrel
- US oil -1.4% to $US49.63 a barrel
- Iron ore -0.8% to $US82.88 a tonne
- Dalian iron ore -0.7% to 581.5 yuan
- LME aluminium -1.4% to $US1702 a tonne
- LME copper +0.1% to $US5667 a tonne
- 2-year yield: US 1.37% Australia 0.73%
- 5-year yield: US 1.37% Australia 0.73%
- 10-year yield: US 1.55% Australia 1.00% Germany -0.41%
- 10-year US/Australia yield gap: 55 basis points
This column was produced in commercial partnership between The Sydney Morning Herald, The Age and IG
Information is of a general nature only.