The View From The Tower

Overnight Snapshot

 
The Day Ahead

0800hrs UK         EU ECB’s Ardo Hansson speaks in Estonia
0900hrs UK         NO Norges Bank Interest Rate Decision (est 0.5% vs previous 0.5%)
0900hrs UK         SW Riksbank’s Stefan Ingve speaks in Stockholm
0930hrs UK         UK Services PMI Business Activity (est 53.6 vs previous 51.7)
0930hrs UK         UK Composite PMI (est 53.48 vs previous 52.5)
1000hrs UK         EU EuroZone PPI (est 0.06%mom / 2.04%yoy vs previous 0.1%/1.6%)
1000hrs UK         EU EuroZone CPI (est 1.37%yoy / Core 0.9%yoy vs previous 1.3% / 1.0%)
1300hrs UK         EU The ECB’s Vitor Constancio speaks in Frankfurt
1330hrs UK         EU The ECB’s Benoit Coeure speaks in Frankfurt
1330hrs UK         CA Canadian Trade Figures (est -C$2.21bln vs previous -C$2.69bln)
1330hrs UK         US Weekly Jobless Claims (est 223.4K vs previous 209K)
1330hrs UK         US Trade Balance (est -$50.5bln vs previous -$57.6bln)
1500hrs UK         US ISM Non Manufacturing Index (est 58.1 vs previous 58.8)
1500hrs UK         US Durable Goods Orders (previous 2.6%)
1500hrs UK         US Factory Orders (est 1.32% vs previous 1.2%)
1700hrs UK         CH Swiss National Bank President Thomas Jordan speaks in Zurich
 
FTSE100 Ex Dividend 4.734 points today – G4S, Kingfisher, London Stock Exchange, Mondi and Unilever
US earnings releases today include Xerox, Tempur Sealy, Dow DuPont, Regeneron Pharma, Marriott Vacations, Kelloggs, Cigna, CBS, Activision, and GoPro

 
The Day So Far….

STOCKS: American stocks fell yesterday as potential US restrictions on Chinese telecom companies reinforced investor concerns about worsening trade relations between the USofA and China. Wall Street’s major indices had been flirting with the idea of a positive day, all posting gains into the European evening as the Fed left interest rates unchanged, but the gains began eroding soon after the policy announcement and slipped further on the news that President Trump is considering issuing an executive order restricting certain Chinese companies from selling telecommunications equipment in the United States. The Dow fell 174.07 points to 23924.98, the S&P500 eased back 19.13 to close 2635.67, and the Nasdaq100 slipped 37.482 to end the day at 6644.478
Asia-Pacific stocks were lower in the main as traders awaited the result of the US-China trade summit which got underway today. Japanese markets were closed for a national holiday. - The Hang Seng dived from the open, losing nearly 2% in the hour or so before clawing back some losses, with tech & property names leading the drop. It is also worth noting that Xiaomi have filed for the largest global IPO since 2014.
- On the mainland, China's Shanghai Composite shed 0.8% before commencing a steady rally just before the lunchtime break which has continued in the afternoon session, with the index currently trading close to the highs. - Australia's ASX 200 bucked the trend, advancing 0.8% to record a 3-Month high and approaching levels not seen since the volatility spike of early February. Financials struck of a soft quarterly earnings release from CBA, with the IT sector leading the way higher. - US index futures are mixed, with the Mini Dow trading 17 points and Mini S&P just 2 points better.
 
US TREASURIES: T-Notes stuck to a 2 tick range in the early part of the Asia- Pacific session, operating in the upper end of Wednesday's range.  Cash Tsys are closed until the London open owing to a Japanese market holiday, and the same will be true tomorrow.- As a reminder on Wednesday The FOMC stood pat, as expected, noting that inflation has moved close to 2.0%, which represented an upgrade in its view,
alongside the introduction of the phrase that "inflation is expected to run near to the Committee's symmetric 2.0% objective over the medium term." On the growth front the Fed dropped the language that previously noted that "the economic outlook has strengthened in recent months."  Eurodollar futures were subject to low volume
 
OIL: Crude drew support from source reports which suggested that US President Trump has all but decided to withdraw from the Iran nuclear deal, which allowed oil to move off of session lows. - WTI added $0.15 to trade at $67.80, while Brent lost $0.15 to trade at $73.20.  Crude was pressured on Wednesday after the official DoE inventory crude headline recorded a much larger gain than expected, with US production inching higher.
 
GOLD: Gold benefitted from source reports which suggested that US President Trump has all but decided to withdraw from the Iran nuclear deal, adding $5 to trade at $1309/oz, with technical support also helping the precious metal.
 
FOREX: The USD has softened a little against the majors in Asia- Pacific dealing as regional participants are seemingly paying more attention to the Fed's inflation target symmetry comments & the removal of the language re: the economic outlook has strengthened in recent months. As a reminder the FOMC stood pat as exp. - USDJPY registered lows under 109.60 with chatter of bids layered into 109.50, the cross last deals at ~109.70. Tokyo is out on holiday on Thursday & Friday. - AUD benefitted from stronger than expected trade data, with AUDUSD pushing onto highs of 0.7527, last ~0.7520. It is worth noting that there is some ~A$1.00bln worth of 0.7500 option expiries at today's 10AM NY cut. NZDUSD also benefitted from the broader based moderation in the USD during early Asia-Pacific hours, adding around 20 pips to trade at ~0.7015. - EURUSD advanced to a high of 1.1987, last at 1.1980, while cable had a brief look at 1.3600, last 1.3595.

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