Markets maintained an overall pro-growth stance in overnight trading, despite some “noise” generated by the end of month and quarter. Share markets diverged, with a mixed Asia Pacific session giving way to Euro weakness, then US strength. However oil and base metals markets lifted, and pressure on safer havens gold and bonds, as well as the US dollar, illustrated an overall positive tilt to sentiment.
The US Presidential debate appeared to have little impact. Markets have already priced a win for Joe Biden, and with no clear winner emerging from the debate there is little change to the outlook. Instead, global investors appeared to respond to stronger China PMI reads. This could mean tonight’s PMI reads in Europe and the US are in focus.
Crude oil markets bounced back from recent falls after weekly US inventory data surprised analysts with a drawdown on both crude and distillate stockpiles. The better demand outlook lifted US stocks. However news that the US Congress is “far from agreement” on another stimulus package and the extension of restrictions on bank dividends and buybacks by the US Federal Reserve saw indices pull back from intra-session highs.
Futures markets point to a positive start to trading today. However ongoing US dollar weakness is lifting regional currencies. This may limit investor enthusiasm, as they contemplate a potential drag on economies from ongoing currency strength.