The release of the minutes from the monthly Federal Open Market Committee meeting confirmed a more “patient” stance. The committee discussed increased economic uncertainty about the economy and the path of interest rates this year, as well as a potential pause in running down its balance sheet. While the Fed backed away from rate rises this year it did not suggest rate cuts were warranted, and this balance lifted assets across the board.
Currency markets were largely unchanged after the US dollar recovered from early session weakness. However shares lifted, bond yields eased and gold rallied to ten month highs. The most eye-catching were industrial commodities. Copper, steel, nickel and crude oil all added more than 1%, spurring further outperformance for Materials stocks.
The Australian corporate reporting season passes the three quarter mark today, with reports from 21 of the top 200 companies. Oil and gas stocks are the stand out performers, with a 34% increase in sales translating into a 68% lift in profits across the sector. Investors will examines Santos’ report today for a similar lift. Telcos are the worst performers so far, with two reports averaging to a 26% decline in profits.
Data reads come back on the radar with the release of Australian unemployment data later this morning. Forecasts of 10,000 – 15,000 new jobs are conservative, but this notoriously volatile monthly data could provide a market moving surprise. Attention then shifts to German and French inflation numbers tonight.