Global markets took a bit of breather yesterday as they await the next catalysts to push them on. Stock indices were mixed across the world with most trading at levels this morning close to where they were the same time yesterday. The US markets closed fractionally in the red with the European bourses slightly more perky, but essentially investors are looking to various risk events ahead to propel the markets one way or the other. There was a touch more volatility in the FX market with the dollar continuing to drive higher, the Dxy hitting 97.00 at one point before dropping back to trade around 96.85 into the Asian open. Commodity markets were also relatively subdued with oil holding Mondays gains, WTI again at $56.50/b and Brent at $65.50/b, Gold remains under pressure south of the 1300 level but did find some support just above the 1280 consolidation level overnight.
Investors are craving certainty again on the various issues that have been pushing market volatility over the last few months and yesterday’s trading day was an anomaly in as much as we didn’t hear anything that had much of a impact on the market. Recent history tells us that this situation is unlikely to remain and traders are looking ahead for the next detail or comment to push markets. Asian markets will continue to monitor China with the National People’s Congress ongoing and comments from Beijing could stimulate positive momentum for Chinese and global markets. The Brexit saga rolls on in the UK and Europe and sterling traders will remain on alert for the next update there despite sterling trading in a relatively subdued manner over the last few sessions.
Looking ahead to today’s trading sessions and the initial focus in Asia will be on Australia with the quarterly GDP numbers due out this morning. Market expectation is for a 0.3% print and any weakness here could send the Aussie dollar plummeting through 70 cents, although the higher percentage event risk trade probably sits to the topside given market positioning. It’s relatively quiet throughout the rest of the Asian session and through the European time zone in terms of fundamental data releases. In the New York session, once the ADP data is released in the US the focus will move swiftly north of the border with the latest Canadian Trade Balance due out followed more importantly by the Bank Of Canada Rate announcement and Statement. The Loonie has seen a significant depreciation over the last few days and has the scope for further volatility today.