Bonds, stocks, gold and crude oil all moved higher overnight after the release of the minutes from the US Federal Reserve’s Open Market Committee most recent meeting.
The minutes revealed deep concern about the outlook for the second half of 2020. In a “bad news is good news” response, investors anticipated more support from the Fed, and bought on expectations of seemingly ever increasing liquidity.
The US dollar was one of the few to fall in overnight trading. The commodity-exposed Australian dollar, Norwegian kroner and New Zealand dollar rose as crude oil prices posted 5%+ gains.
Crypto and alt coins generally lifted, led by a 4% rise in Cardano, but bitcoin is curiously under pressure, and testing key support at $9,500.
CBA Australia PMI’s may cast a sombre tone over local trading. The readings for May showed further contraction in the economy, with the composite measure at 26.4, up from April’s 21.7, but well below the breakeven mark at 50. Japanese trade and PMI data is due this morning ahead of European and US PMIs tonight. Market sentiment remains buoyant despite forecasts of contractionary readings in every case.
US continuing jobless claims are expected to expand to 24.3 million from the previous week’s 22.8 million. Last night’s gains indicate there is potential for investors to keep buying in the face of another clear indicator of economic destruction.
Asia-Pacific markets have responded cautiously to recent US exuberance, with major indices recording more modest gains. Futures markets suggest a similar reaction today from local investors.
CMC Markets Singapore may provide or make available research analysis or reports prepared or issued by entities within the CMC Markets group of companies, located and regulated under the laws in a foreign jurisdictions, in accordance with regulation 32C of the Financial Advisers Regulations. Where such information is issued or promulgated to a person who is not an accredited investor, expert investor or institutional investor, CMC Markets Singapore accepts legal responsibility for the contents of the analysis or report, to the extent required by law. Recipients of such information who are resident in Singapore may contact CMC Markets Singapore on 1800 559 6000 for any matters arising from or in connection with the information.