To the scoreboard:
Dow: 24,671.28 +70.01 (+0.28%)
S&P 500: 2,665.92 +9.92 (+0.37%)
AUD/USD: 0.7861 -0.0001 (0.01%)
ASX200 SPI futures (March 2018 contracts): 5,811 (+18)
1. Italian stocks led European markets lower while the US S&P500 pushed slightly ahead in a relatively quiet session, ahead of the all-important January inflation data tonight (12:30am AEDT). The annual rate of core inflation is forecast to come in at 1.7%. Any number higher than that may set off another wave of activity across asset classes.
2. Big day of data: Before the US inflation figures, Japan has Q4 GDP data today during Asian trade. There’s also German inflation data later this evening, along with a Q4 GDP reading for both Germany and the broader Eurozone. Domestically, Westpac’s monthly consumer confidence reading — which has been pushing higher in recent months — will be released this morning.
3. In currencies, US dollar weakness remained overnight as the pound pushed higher in the wake of stronger than expected UK inflation data. And USD/YEN fell back under 108 overnight for the first time since September, although the Aussie was unable to make ground amid the US dollar weakness and traded flat on the session.
4. The recent strength in the yen is weighing on the export-heavy Japanese stock market. Traders will also be watching the Nikkei this morning which will open at 21,244 — only just above its 200-day moving average of 21,160.
5. Get your forks out: In crypto-land, Litecoin slid overnight after the announcement of a hard-fork, although Litecoin’s founder warned it could be a scam. And while US regulators continue to hold off on approving a Bitcoin ETF, JP Morgan says the increased liquidity provided by an ETF vehicle could be a game-changer.
6. US 10-year bond yields edged lower to around 2.83% overnight, but the managers of James Packer-backed Ellerston Capital are on high alert for more bond market jitters this year. Speaking at an investment summit yesterday, the AFR reports that Ellerston’s Brett Gillespie is forecasting yields to rise to 3.5%, with risks of a sharper spike if the US Fed gets caught chasing inflation this year.