Welcome to the end of your working week – hopefully. Here’s all you need to know to finish with a bang.
– The big news overnight is that the ECB president Mario Draghi gave a very strong signal that the ECB will begin further easing in June. James Shugg from Westpac London said that Dragi “acknowledged that the Council was disturbed by the inflation outlook” and “is comfortable with acting next time, but [first] we want to see the June staff projections”. He said a decision to ease in June had not been taken, but he was giving, “a preview of the discussion we will be having”.”
– The impact was very positive for European shares which were strongly higher across the board but negative for euro which lost 0.42%. It still remains strong at 1.3852 this morning. In London, stocks rose 0.63% to 6,839, the DAX was 0.90% at 9,607 and the CAC rose 1.36% to 4,507. In Milan and Madrid, shares surged 2.3% and 1.7% respectively.
– Naturally, US stocks were less excited by Draghi’s comments although Fed chair Janet Yellen did reiterate the previous day’s comments, implying rates aren’t moving up any time soon. At the close, the Dow was up 0.2% to 16,551, the Nasdaq lost 0.41% and the S&P 500 was down 2 points to 1,876.
– In Asia yesterday, the ebullient lead from Wall Street and the Chinese Trade data lifted stocks across the region with the Nikkei up 0.93% and the Hang Seng up 0.42%. Stocks in Shanghai rose 0.24%. Today’s CPI in China is the big release for the region.
– All of which left the ASX Futures up just 2 points in overnight trade with the SPI 200 June contract to 5,461.
– On Currency markets, the Aussie is higher this morning but not on the back of the employment data as many commentators are saying. Rather, it’s on the back of the strong Chinese trade data and in particular what it said about Chinese bulk imports of things like iron ore. It sits at 0.9376, almost 2 cents higher off the recent low. The euro, as noted above, was weaker and USDJPY fell, sitting at 101.52 this morning. Of the majors, only the pound stood still at 1.6939 this morning.
– On Commodity markets, Nymex crude dropped 0.5% to 100.25, Gold barely moved and sits at $1,289 oz while Copper popped 3 cents – no doubt on the Chinese data – back to $3.08 lb. On the Ags, Corn rose 0.69%, Wheat was down 0.41% and Soybeans surged 1.6%.
Looking at the data today, the big local release is the RBA’s quarterly Statement on Monetary Policy which will be released at 11.30am. At the same time, Chinese CPI will be released so it is going to be busy around lunchtime. Tonight sees the release of German trade data, Italian and UK industrial production data and US wholesale inventories.
Here is CMC Market’s Stock to Watch today from chief market analyst Ric Spooner:
While chairman James Packer copped a well publicised shiner over the weekend, it seems that yesterday the market decided to wallop his share price as well.
After a leading jab last week where the market gingerly tested trendline and 200-day moving average support, yesterday looked like a heavier blow. Price finished close to its low with an ugly looking red candle and down 2.6% on the day. For chartists this is beginning to look like a significant breach of support.
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