Global financial markets had another steady day ahead of what should be a relatively quiet day today with many of the worlds markets enjoying a day off. Stock markets were mixed once again, Asian markets dropping earlier in the day after poor Chinese PMI numbers whilst European bourses were better bid after a stronger than expected first quarter GDP print. US markets were as mixed as the rest of the globe as earnings season rolls on, last night’s Alphabet results had pressured the tech market during the session however futures were lifted late in the day as Apple reported a more upbeat sales forecast. The dollar dropped further over the days trading with the Dxy now trading back down at 97.50, this strongly influenced by the Euro’s climb after the earlier stronger data releases. Oil remains volatile and gained some of its recent losses back overnight as reports of violent clashes in Venezuela hit the market, WTI climbing as high as $64.70 earlier in the day before dropping back to $63.50 on the US close.
The kiwi has been in focus already today in early Asian market trading as employment data came out much worse than expected. The unemployment rate actually dropped by 0.1% but both the quarterly and yearly employment numbers saw significant misses and the currency took at 0.6% hit on the release. Investors will now be looking to the RBNZ to see if this pushes them closer to a rate cut either next week or in the coming months.
Investors are set for a strange days trading ahead, with the market being set up for the perfect ‘calm before the storm’ trading day. The majority of Asian and European markets are closed which should lead to quiet, low volume trading conditions in the first couple of sessions. However the small matter of the world’s most influential central bank’s rate announcement at the end of the day could lead to some sharp moves both before and after the event. The market is expecting to hear more of the patient ‘wait and watch’ rhetoric from Jerome Powell et all at the Fed and any change in stance could lead to some significant moves across products especially if we’ve seen tight range bounds conditions ahead of the event. Investors will also be aware that the US team is now in Beijing for the next round of trade talks and early indications are that things may not progress as smoothly as is be priced in, once again any big updates on this front could see some strong moves in holiday thinned markets.
Looking ahead to todays trading and it really is all about the Fed today and probably even more so than normal given the holidays across the globe. With the NZ employment data out of the way, there is very little on the calendar in the Asian time zone. UK markets are open today and the latest Manufacturing PMI number are due for release early in the session but expect the focus to move swiftly to the US as the day progresses where the ISM Manufacturing PMI is due out before we get the conclusion of the latest Fed Meeting at the end of the day.