Global markets experienced another steady trading day yesterday with the majority of stock markets closing the day in the black. The US markets probably had the worst of it as another mixed bag of earnings reports weighed on the indices, the S&P closing close to flat with the Dow and Nasdaq up 0.26% and 0.3% respectively. FX volatility picked up a touch with the dollar gaining ground against most of the majors, the Dxy back up to just south of 97.10 this morning. Oil came back slightly better bid on the day with WTI now back around $64.4 and Brent at $71.7 with Gold once again sliding now sitting just above key fibo support at 1275.
We saw a much worse than expected print on NZ CPI this morning, the QoQ data coming out 0.1% vs exp 0.3% and the YoY at 1.5% vs exp 1.7%, not surprisingly the kiwi dropped sharply on the release from 0.6770 to 0.6670 before recovering to the 0.6700 level. This will increase pressure on the RBNZ to cut interest rates sooner than expected and they may well now be the first of the developed world’s Central Banks to cut rates in the coming months, perhaps as soon as May.
Looking ahead to todays trading and the major focus of the Asian session will be the Chinese data releases later this morning when GDP, Industrial Production, Retail Sales and Fixed Asset Investment numbers are all due. GDP data which has an uncanny ability to come out on or close to expectation is set to show further slowing of the economy in Q1 although investors are hoping that this could be a base as domestic stimulus starts to kick in and leads to a better growth story later in the year. Later in the day the focus will move to the UK with the latest CPI data due out there as well as any Brexit updates, BOE Governor Carney is also set to speak later in the day. On the New York open, the focus will move swiftly north of the border with the release of CPI numbers in Canada, however expect earnings reports to once again dominate the session with little else due out on the calendar.