Globally, stock markets had a mixed night as a US stimulus bill remained stalled. European data exceeded, estimates, but US jobless claims disappointed and weighed on investor sentiment. Bonds rallied. In contrast, commodities went on with the pro-growth rally, lifting commodity currencies against a falling US dollar. The European Central Bank surprised no-one with an extension of its bond purchase program.
The 2% plus rally in crude oil overnight is all the more impressive in light of the huge build in US weekly inventories. The positive moves were confirmed by similar moves in copper, which is trading at a six year high. On the flip side, gold fell despite a rally in bonds and a weaker US dollar.
UK GDP, manufacturing and construction data surprised analysts, pointing to a better than expected economic bounce. However US data suggested that re-instituted lockdown measures are starting to bite, with 853,000 thousand people filing for unemployment last week. The inability of the major political parties to agree on even a modest fiscal stimulus package is presenting an increasing challenge to vaccine optimism.
Asia Pacific markets are looking at a soggy start to trading. The bright spot is solid overnight gains for the Australian and New Zealand dollars, which may offset investor jitters. Blood product giant CSL this morning told investors it will not proceed with further Covid-19 vaccine trials, after a number of false positive results for HIV in its preliminary testing. Pressure on the largest listed Australian stock militates against a positive session.