Global stock markets had a good day yesterday, to finish what has been a tough month on a positive note. Asian stock markets had led the way with the Nikkei posting a 2.16% increase by the end of the day and the other markets followed suit as some more investor confidence crept back into global risk appetite. Facebook earnings data helped the US markets surge higher with the Nasdaq closing up 2%. Treasuries dropped off, with the US 10 year trading up to 3.16% again and the dollar gained with the Dxy maintaining its level above 97.00, this move helped by another strong ADP Non-Farm print. The pound managed to rally off of recent lows as both the UK and EU came out with positive news on Brexit with the UK’s lead negotiator claiming that a deal should be concluded by November 21.
Markets continue to trade in line with overall investor sentiment but as we hit the start of a new month fundamental data will become more of a focus. The Non-Farm payrolls on Friday will be closely monitored as market participants continue to look for signs that the US economy is slowing on the back of the trade war with China. The Fed is certainly not of that opinion yet but if we do start to see negative data prints in the US over the next couple of months as we approach the new year then we may see a change of rhetoric from the FOMC.
Looking ahead to today’s trading sessions and the Asian market is set to kick off on the front foot after a strong US day. It’s relatively quiet in terms of economic data releases early on with just the Australian Trade Balance numbers of any real concern to traders in the Asian session. The London session should be more lively with the UK’s Manufacturing PMI due out a couple of hours before we hear the latest rate announcement from the Bank Of England, Governor Carney set to speak half an hour later in a scheduled press conference. The main focus of the New York session will be the ISM Manufacturing data release along with the continuing earnings reports which look set to keep investors on their toes.