Global markets experienced a relatively calm day yesterday as investors continue to look ahead to the G20 meeting at the end of the week. Stock markets had a mixed day across the board without any really strong moves in the majors indices. The US markets finished the day in the black and we’re expecting a positive yet subdued start to the Asian session this morning. The dollar continued to grind higher with the Dxy touching 97.50 at one point during the day, just shy of the 97.70 yearly high. Commodities also had a quiet day with Oil holding around yesterday’s levels, WTI just above the $50/b market and Brent around $61/b and Iron Ore took a break from it’s recent downward spiral to consolidate just above the 460 level. Treasuries were steady after we heard from the Fed Vice Chair Richard Clarida, he stayed very much in line with the recent Fed message that gradual hikes are still appropriate in the current environment.
Markets feel poised for some significant moves and it does look like this G20 meeting is shaping up to be one of the most important in recent history in terms of market focus. Of course it’s not that actual summit that investors are focussing on but the meeting between the President Trump and President Xi and whether we get any positive result for global growth. It’s unlikely that we will get a concrete agreement between the two sides this week but the market will take any promise of further cooperation as a positive and it will react accordingly. Recent price action suggests that there is a leaning towards optimism in the markets going into the meeting and therefore the risk sits to the downside, however the market should rally well if the two super powers look to be coming to some kind of an arrangement.
It’s another quiet day in terms of fundamental data releases today and as indicated above the market focus will continue to look to the end of the week. However there will be a strong focus on the US market and the dollar as we move into the New York session where we have the latest US Prelim GDP data out as well as speech from Fed Chair Jerome Powell later in the day.