To the scoreboard:
Dow: 24,897.18 +359.12 (+1.46%)
S&P 500: 2,721.82 +30.57 (+1.14%)
AUD/USD: 0.7764 +0.0001 (+0.01%)
ASX200 SPI futures (March contracts): 5,944 (+60)
1. Nothing to see here: Global stock traders put the recent concerns about a trade war to one side overnight, with the S&P500 up strongly while markets in the UK and Europe also climbed by more than 1%. The shift in sentiment has put ASX traders in a bullish mindset, with futures markets pricing in a full reversal of yesterday’s losses.
2. Dalio stays calm: While we’re on the subject of a trade war, billionaire hedge fund manager Ray Dalio thinks the threat is unlikely to match the actual reality. In a note on LinkedIn, Dalio compared the recent market reaction to last year’s geo-political tension with North Korea — which ended up subsiding. However, he said to take his view with a grain of salt.
3. The US dollar edged higher overnight, while the euro held steady at above $US1.23 amid some uncertainty from Italy’s election gridlock. The moves among commodity bloc currencies were slightly less convincing despite the bullish sentiment in global markets. The AUD is largely unchanged ahead of a huge day of data, as iron ore prices continued their recent slide overnight.
4. The day ahead: Retail sales figures for January are due from the ABS at 11:30am AEDT. The median forecast is for growth of 0.4% after sales slumped in December. There’s also balance of trade data including the reading for net exports — a key indicator ahead of tomorrow’s Q4 GDP release. And the RBA rounds out a huge day with it’s monthly interest rate announcement at 2:30pm AEDT.
5. In line with increased risk appetite overnight, US and Australian bond yields edged higher across the curve with benchmark US 10-years sitting at 2.89% this morning. Gold is at $US1,319, down from an overnight high of $US1,327 while the US dollar gained ground against the safe-haven Japanese yen.
6. And here’s some reassuring news for traders positioned for global growth to continue: a composite global PMI index maintained by JP Morgan and IHS Markit rose to a 41-month high of 54.8 in February. US data overnight also showed non-manufacturing PMIs easily beat forecasts last month. Here’s a summary of the composite PMIs, via Greg McKenna at AxiTrader:
Have a great day.