Stocks rallied in overnight trading despite weaker than expected macro data in the UK and US. Bonds and currencies marked time as investor attention turned to the US corporate reporting season. Improving bottom lines sparked support for risk assets, and trade concerns remained below the market radar.
For the second night in a row reporting top 500 companies delivered a clean sheet of “beats”. This means 29 results in a row have exceeded analyst expectations. The positive responses in single stocks are a key contributor to the broad market rise.
Futures markets are pointing to an opening lift across the Asia Pacific region. The response of investors in Hong Kong and Shanghai will be in the spotlight given recent persistent weakness. It appears investors in China are much more concerned about the potential impacts of a trade war than their global peers.
Australian jobs data is expected to show an increase of about 16,500 jobs in June. This should see the unemployment rate steady at 5.4% but it may swing on changes in the participation rate.