Good morning and happy Friday.
To the scoreboard:
Dow: 25,570.33 +201.20 (+0.79%)
S&P 500: 2,767.12 +18.89 (+0.69%)
AUD/USD: 0.7891 +0.0048 (+0.61%)
ASX200 SPI futures (March 2018 contracts): 6,020 (+7)
1. The euro rose sharply after currency traders deemed the minutes from the European Central Bank’s December meeting were more hawkish than expected. And following yesterday’s strong retail data print, the AUD is close to breaking above US79 cents this morning for the first time since September.
2. US stocks hit another record high: Markets rebounded amid weakness in the US dollar while bond yields also fell. The S&P500 has now climbed by more than 3% in 2018 ahead of the latest earnings season which kicks off tonight, including banks JP Morgan and Wells Fargo.
3. Gains in US stocks were led by the energy sector, which rose more than 2% as brent crude oil briefly climbed above $US70 a barrel for the first time since December 2014. Iron ore also rose again last night and is now at its highest level since August 22.
4. US bond yields continued to edge lower after yesterday’s spike, with strong demand for an auction of 30-year US debt providing some reassurance to the market. Key inflation data is scheduled for tonight, with core inflation forecast to remain below the US Fed’s 2-3% target range.
5. Cryptocurrency Ripple climbed another 5% overnight after announcing a partnership with a listed money transfer company, amid broader downside pressure on other major cryptos following a yesterday’s crackdown in South Korea. And while bitcoin may be a form of decentralised money, research from Credit Suisse shows 97% of bitcoins are held by just 4% of addresses.
6. Big year of deal-making ahead: Stable market conditions in 2017 provided the backdrop for $US3.7 trillion worth of deals in US mergers and acquisitions, and Citi analysts said 2018 could be even bigger. They cited the continued global economic expansion and the flow-on effect from US tax cuts as two key drivers of further activity.
Enjoy your weekend.