Monday 14th May: Asian markets higher on signs of US-China relationship thawing

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IC Markets Market Review
IC Markets Market Review

Global Markets:

  • Asian Stock Markets : Nikkei up 0.45%, Shanghai Composite up 0.43%, Hang Seng up 1.26%, ASX up 0.25%
  • Commodities : Gold at $1320.30 (-0.03%), Silver at $16.74 (-0.07%), Brent at $76.72 (-0.52%), WTI Oil at $70.45 (-0.35%)
  • Rates : US 10-year yield at 2.962, UK 10-year yield at 1.441, Germany 10-year yield at 0.558

News & Data:

  • (USD) Prelim UoM Consumer Sentiment 98.8 vs 98.4 expected
  • (CAD) Unemployment Rate 5.80% vs 5.80% expected
  • (CAD) Employment Change -1.1K vs 17.8K expected
  • Italy’s populist 5 Star, League parties reach deal on government program
  • Minerals Council urges support for TPP
  • Dollar treads water; rally loses steam as U.S. yields sag

CFTC Positioning Data (Week Ending May 8th, 2018)

  • EUR long 121K vs 121K long last week.
  • GBP long 9K vs 26K long last week.
  • JPY short 5K vs 1K short last week.
  • CHF short 33K vs 19K short last week.
  • CAD short 24K vs 28K short last week.
  • AUD short 6k vs 7K short last week. 
  • NZD long 13K vs 17K long last week.

Markets Update:

Asian markets rose to near two- month highs today, the highest since the trade-tensions began to show, after a perceived thaw in US-China trade tensions. President Donald Trump pledged to help get ZTE Corp “back into business fast”, as it was hurt by a US ban.

The North Korea angle also signals the need for the US and China to bury the hatchet at the earliest possible, as a settlement with North Korea will not be effective, unless the US has China by its side. The United States has said it will lift sanctions on Pyongyang if North Korea agrees to completely dismantle its nuclear weapons program.

The Japanese market recovered after a weak start and is modestly higher, following mixed cues from Wall Street. A stronger Yen continues to eat into exporters’ revenues, pulling down their shares.

The Australian market is also modestly higher, with mining and oil stocks leading from the front.

Brakes were applied to the US dollar’s rally, as US yields were sinking, with investors lowering their expectations about rapid rate hikes this year. The Bank of England and Royal Bank of New Zealand, have both reiterated over the last week that the official cash rate will remain at the lows as is for some time.

In other news, the United States threatened on Sunday to impose sanctions on European companies that do business with Iran, as the remaining participants in the Iran nuclear accord stiffened their resolve to keep that agreement operational.

Upcoming Events:

Monday, May 14th 2018

  • 06:45 AM GMT – (USD) FOMC Member Mester Speaks
  • 11:10 PM GMT – (AUD) RBA Assist Gov Debelle Speaks

Tuesday, May 15th 2018

  • 01:30 AM GMT – (AUD) Monetary Policy Meeting Minutes
  • 01:40 AM GMT – (AUD) RBA Assist Gov Debelle Speaks
  • 02:00 AM GMT – (CNY) Fixed Asset Investment ytd/y
  • 02:00 AM GMT – (CNY) Industrial Production y/y
  • 06:00 AM GMT – (EUR) German Prelim GDP q/q
  • 07:15 AM GMT – (CHF) PPI m/m
  • 08:30 AM GMT – (GBP) Average Earnings Index 3m/y
  • 08:30 AM GMT – (GBP) Claimant Count Change
  • 08:30 AM GMT – (GBP) Unemployment Rate
  • 09:00 AM GMT – (EUR) Flash GDP q/q
  • 09:00 AM GMT – (EUR) German ZEW Economic Sentiment
  • 09:00 AM GMT – (GBP) Inflation Report Hearings
  • 12:30 PM GMT – (USD) Core Retail Sales m/m
  • 12:30 PM GMT – (USD) Retail Sales m/m
  • 12:30 PM GMT – (USD) Empire State Manufacturing Index
  • Tentative – (USD) Mortgage Delinquencies
  • Tentative – (NZD) GDT Price Index
  • 05:00 PM GMT – (USD) FOMC Member Williams Speaks
  • 11:50 PM GMT – (JPY) Prelim GDP q/q

Wednesday, May 16th 2018

  • 01:30 AM GMT – (AUD) Wage Price Index q/q
  • 09:00 AM GMT – (EUR) Final CPI y/y
  • 12:00 PM GMT – (EUR) ECB President Draghi Speaks
  • 12:30 PM GMT – (CAD) Manufacturing Sales m/m
  • 12:30 PM GMT – (USD) Building Permits
  • 12:30 PM GMT – (USD) FOMC Member Bostic Speaks
  • 12:30 PM GMT – (USD) Housing Starts
  • 01:15 PM GMT – (USD) Capacity Utilization Rate
  • 01:15 PM GMT – (USD) Industrial Production m/m
  • 02:30 PM GMT – (USD) Crude Oil Inventories
  • 04:00 PM GMT – (CAD) Gov Council Member Schembri Speaks
  • 04:00 PM GMT – (CHF) SNB Chairman Jordan Speaks

Thursday, May 17th 2018  

  • 01:30 AM GMT – (AUD) Employment Change
  • 01:30 AM GMT – (AUD) Unemployment Rate
  • 02:00 AM GMT – (NZD) Annual Budget Release
  • 12:30 PM GMT – (CAD) Foreign Securities Purchases
  • 12:30 PM GMT – (USD) Philly Fed Manufacturing Index
  • 12:30 PM GMT – (USD) Unemployment Claims
  • 04:00 PM GMT – (GBP) MPC Member Haldane Speaks

Friday, May 19th 2018

  • 07:00 AM GMT – (USD) FOMC Member Mester Speaks
  • 12:30 PM GMT – (CAD) CPI m/m
  • 12:30 PM GMT – (CAD) Core Retail Sales m/m
  • 12:30 PM GMT – (CAD) Common CPI y/y
  • 12:30 PM GMT – (CAD) Median CPI y/y
  • 12:30 PM GMT – (CAD) Retail Sales m/m
  • 12:30 PM GMT – (CAD) Trimmed CPI y/y
  • 01:15 PM GMT – (USD) FOMC Member Brainard Speaks
  • &more…

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