We saw a bit of a relief rally across the equity markets throughout yesterday’s trading with the majority of indices finishing nicely in the black, the Dow closed up 1.7% with the S&P not far behind at +1.39%. The currency markets reacted in kind with the dollar drifting lower against most of the majors and the Dxy trading down to around 90.15 as we enter the Asian session. Commodities also showed signs of consolidation during the session although the market is waiting to see if this is just a resetting phase in their recent sell off.
The main focus for the market this week is definitely the US CPI data but that is still a few trading sessions away and we expect to see further consolidation up to that event. However, there are a few pieces of fundamental economic data due out prior that could cause moves in the market. First up today in Australia we have the NAB Business Confidence numbers and we’re also expecting to here the Budget proposals form the White House during the course of our morning which could add some flavour to the markets.
Into the London session and the big focus will be on the UK CPI numbers, Sterling is currently stuck between the ‘hard place’ of Brexit comments and the ‘Rock’ of Bank of England Hawkish sentiment and these numbers could see some decent moves in the Cable and sterling crosses. There is very little scheduled in the New York session and once again we expect the focus to move to the equity markets and bond markets as we move closer to those key CPI numbers.
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Monday’s City: Skardu, Pakistan