Good news comes in threes. Overnight British PM May survived a vote of no confidence, Italy’s government committed to a lower budget deficit, and both Washington and Beijing reportedly made positive moves on trade. The pound rose and the US dollar edged lower. US inflation data matched forecasts. Shares across the northern hemisphere recorded strong gains, and bonds sold down, as investors regained confidence.
Commodity markets contradicted the general market sentiment. Base metals were mixed, and oil fell on lower reported usage in the US. Gold lifted back above US $1,250. Combined with a late sell down in North American stocks, this may explain the cautious trading in Asia Pacific futures. Nikkei futures are pointing to a small lift, and Australia 200 futures are in the red despite the general global enthusiasm for shares.
Financial stocks led European markets higher as worries about growth faded, and trading in Australian banks could determine whether today’s session brings a gain or a loss for the broader market. Both ANZ and NAB hold annual general meetings next week, and management may be steeling for a torrid time after Westpac shareholders voted against executive pay at yesterday’s AGM.
