Good morning and happy new year.
To the scoreboard:
Dow: 25,295.87 +220.74 (+0.88%)
S&P 500: 2,743.15 +19.16 (+0.70%)
AUD/USD: 0.7864 +0.0028 (+0.36%)
ASX200 SPI futures (March 2018 contracts): 6,092 (+18)
1. Global stock sentiment stays bullish: The ASX200 looks set to open higher as US stocks capped a 2.6% weekly gain on Friday night, despite a data miss in monthly employment figures. Stock markets are at record highs, but Goldman Sachs says more volatility awaits in 2018 — here’s how to take advantage.
2. US dollar holds steady: Softer employment data didn’t spark another round of selling in the US dollar which has been under heavy pressure to start the year. The euro remains just off its 12-month high after inflation data fell short while the big mover on Friday night was the Canadian loonie, which rose strongly after Canada’s own jobs data smashed expectations.
3. Mixed messages from the Fed: Comments on Friday showed committee members of the US Fed are still split on the best way to proceed with interest rate tightening in 2018, factoring in a flat yield curve and the outlook for inflation.
4. Iron ore is off to a strong start: Spot prices for benchmark 62% fines are at their highest level since early September, having gained around 6% so far in 2018. Oil remains near its highest level since mid-2015 amid political tensions in Iran, but some analysts doubt the latest rally can last.
5. Crypto investors look to leverage up: Bitcoin is trading around $US16,000 to start the week, as the New York Stock Exchange seeks permission from regulators to set up Exchange Traded Funds which will allow leveraged investments on bitcoin futures. Oh, and a cryptocurrency created as a joke about a dog meme now has a market cap above $US2 billion.
6. The week ahead: The headline data release of the week is likely to be Thursday’s retail sales figures for November. This morning there’s the Ai Group’s monthly construction data index, and tomorrow the ABS has November building approvals data. Looking abroad, the US has December inflation data to end the week on Friday.