Global stock markets had another strong day to yesterday to start the trading week and indeed quarter on a very positive footing. Indices across the globe reacted well to stronger data and increased hopes on the trade front with the S&P notably closing the day at it’s highest level since October. It wasn’t all good news though with some of the European PMI data missing to the downside and US Retail Sales numbers coming out way below expectation. The dollar continued to remain strong against the majors with the Dxy trading up to 97.35. The pound had another whippy day as once again parliament failed to agree on any alternative Brexit proposals and Euro remained under pressure near recent lows. Oil made fresh highs again with WTI now sitting in touching distance of $62/b and Brent up at $69/b, Gold took more of a hit trading down to levels sub 1290.
Investors will continue to monitor all the moving parts of the financial markets as we move into Q2 but it seems that the current market conditions are conducive to continued increases in investor sentiment and more gains in global equities. There’s no doubt that more dovish rhetoric from central banks has assisted with recent moves as have stimulus programs across the globe but some investors will now be questioning how long the good times can last. Possible head winds from both Brexit and the trade negotiations between China and the US could have a dramatic effect on the situation but until we get clarity on either situation is seems the market it content to keep driving higher.
Looking ahead to todays trading and it’s a big day for the Australian market, the latest Building Approvals data are due out this morning before the latest RBA rate announcement and statement with the Federal Budget due for release later this evening. No change is expected from the Reserve Bank but after last months much more dovish turn, traders will be looking closely at the statement today for any indication of a pending rate cut. The budget is likely to have less of any affect on the markets but will as always still be keenly observed by participants. There’s little else due out in the Asian session and the London day will once again have a heavy focus on the UK with the Brexit deadline another day closer. Durable Goods data is due out in the US session with investors hoping for stronger prints again to keep the topside momentum moving through the markets.