Overnight we saw a continuation of the risk on move across financial markets with the majority of global stock indices finishing the day nicely in the black and the Asian markets set to follow on with that pattern on their opens this morning. It’s a different story in the commodity markets with prices falling, Oil continues to back off from recent highs as OPEC looks to ensure that supply meets demand and Gold continues to look weak with risk appetite returning to the market after Friday’s strong US jobs data.
Looking ahead to today’s sessions and the market will initially turn its focus to Australia and the RBA’s latest meeting, however any interest is set to be short lived with no change firmly expected in the rate and little change expected in the statement and its message to the market. The GDP figure later this week should provide much better insight and trading opportunities for investors.
Into the London session and investors will turn their focus to the UK with the Services PMI number due and the MPC’s Cunliffe speaking shortly after. The main data due out in the New York time zone is the ISM Non-Manufacturing PMI data and investors will be watching closely to see if a strong print here, higher than the expected 57.9, will back up Fridays good numbers.
Once again, the market is latching on to what appear to be good fundamentals and conditions for growth, players will continue to sail with the wind while it lasts, however there’s a firm eye on the horizon for potential trade and Geo-Political storm clouds and any sign that these could get too close could see the market batten down the hatches as downside volatility returns.