Global stock markets had a tough day yesterday as investor concerns continue to increase on global growth. The US indices closed in the red with the Nasdaq just shy of 1% down followed by the S&P and Dow, printing losses of 0.65% and 0.52% respectively. The dollar remained bid and was mixed against the majors with the Dxy once again failing to break through 97.00, trading around 96.85 again as the Asian market opens. The Aussie was hit after GDP data disappointed yesterday, the currency sitting just above the key psych 70 cent level now as dovish expectations are increasing for the RBA. Commodities dropped lower on the day, led by Oil which was hit after the US announced bigger than expect crude stockpiles, Gold remained offered but seems to be consolidating above support around 1280.00.
Several key data prints recently have confirmed that the global economy is starting to slow and forecasts are coming in increasing lower, this is now starting to weigh on sentiment and global stock markets. The OECD yesterday enunciated what the market has known for a while, that the global economy is suffering from trade concerns and political uncertainty. Stating that ‘the global expansion continues to lose momentum’ it revised its growth forecasts down globally with the Eurozone taking the most pronounced hit, expectations down to 1% form 1.8% and overall global numbers down to 3.3% from 3.5%. Unless we start to get more certainty on trade and other geo-political issues, then these factors will start to weigh more and more heavily on sentiment and could lead to more significant pull backs on the gains that we have seen in the first couple of months of 2019.
Looking ahead to today’s trading and the early focus in Asian will once again be on Australia with the release of the latest Retail Sales data, the Aussie is looking vulnerable and another poor print could see it tumble through 70 cents. The main focus of the London session will be the ECB rate announcement, statement and Press Conference, the market it expecting a more dovish outlook from Mario Draghi and we could see plenty of volatility in the single currency around the event. It’s quiet in terms of fundamental data releases in New York so expect traders to continue to focus on sentiment drivers for any fresh direction.