Market action was surprisingly muted overnight. Modest pressure on bond prices saw stocks edge lower, but trading volumes and ranges were considerably lower than recent experience. Commodity and forex markets were also quiet. That may change today as important data is released.
China trade data due at an unspecified time today is forecast to show further extraordinary increases in imports (+23.3%) and exports (+35.5%) in March. Any disappointment on these numbers could affect the global growth outlook, especially in light of ongoing trade disputes. Tonight brings the release of US CPI numbers for March. Analysts expect a core reading of 1.5% year-on-year, below the US Federal Reserve’s target for annual inflation of 2%. Markets are vulnerable to any upside surprise, given the implications for interest rates.
Another factor weighing on share market activity overnight is the imminent release of earnings reports from US financial stocks, starting tomorrow night. These early reporters often provide clues to the overall path of the corporate earnings season due to the financial sector’s leverage to the broader economy.
Commodity markets are also noticeably calmer. Gold has barely moved over the last few sessions, possibly reflecting subdued US dollar trading. Crude oil markets are the stand out, heading towards the sixth session in a row of little or no change. Nickel markets provided the exception with a 3% slump that will likely affect nickel miners in trading today.
Despite the overall stasis, futures markets indicate small opening gains in Hong Kong and Australia These positive impulses are somewhat offset by pressure on regional currencies, and support for the Japanese yen and US dollar may indicate a growing risk aversion among Asia Pacific investors.