News & Analysis
U.S – China plan new trade talks – Chip maker loses hurt Nasdaq; Oil jumps – Inventories surprise drop; BOE – ECB meet tonight
Upcoming high impact news:
21:30 GBP Monetary Policy Summary – Monetary Policy Summary – Official Bank Rate EXP 0.75%
21:45 EUR Main Refinancing Rate EXP 0.00%
22:30 EUR ECB Press Conference
22:30 USD CPI – Core CPI
U.S stocks ended mainly higher on Wednesday, the Dow Jones added 27.86 mainly boosted by Boeing and Caterpillar. Gains were capped by sharp losses from 3M. The Nasdaq gave back 18.25 as shares of chipmakers fell sharply. The S&P500 added 1.03 as trader’s dealt with mixed influences.
Trade weighed in last night’s session, news that the U.S and China will resume trade negotiations lifted stocks, the Dow and S&P500 hit session highs after the positive development. Quincy Krosby, chief market strategist at Prudential Financial, said this is a positive for the market, but added: “We’ll need to see some follow-through to take trade out of the risk column.” In data news the US PPI index missed expectations falling to -0.1%.
European stocks ended higher, oil and gas stocks were among the top performers Wednesday, finishing up 1.6% as investors continued to monitor rising crude prices. Retail another top performer added 1.5% boosted by earnings news. Galapagos shares surged to the top of the European benchmark, closing 17.58% high, following positive trial results for a drug designed to treat rheumatoid arthritis. Traders also maintained their focus on the ongoing trade between the U.S and China. The FTSE closed 39.82 pts higher the DAX added 62.03 and the Euro Stoxx 50 closed 16.50pts higher.
Oil jumped adding a further 1.6% after U.S crude inventories fell by 5.3M. This was a decent shock to the market as inventors were expected to fall by around 1.3M. Loss of Iranian supply also added to concerns over supply and production. USOUSD closed 40 cents higher at 70.5 after hitting 70.92 during the session.
Gold rallied adding $7.60 as the USD retreated, calming trade worries shifting demand from safe havens to risk. The AUD made solid gains to the USD and JPY. The EUR and GBP fought back from losses to end higher to the USD but lower the Yen. Risk continues to make gains this morning to the Yen and USD.
Tonight we have central bank rates and statements coming out from the Bank of England and the ECB. The BoE is expected to hold rates at 0.75% and the ECB to hold at 0.00%. Traders will be looking to the monetary statements for clues on future movements. Tonight’s U.S CPI data is also worth a mention to the current sensitivity regarding the Feds rate stance. A higher than expected result in U.S CPI could a very negative impact on stocks as we saw after last Friday’s average earnings.
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Sources; CNBC – All times are AEST
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