Cautious optimism informed overnight trading as further indications of willingness on global trade buoyed sentiment. The US dollar rose, bonds fell and shares rallied for a second session. The updraft faltered early in the North American session after US senator Rubio flagged a possible new tax on share buybacks, but President Trump managed to tweet the markets off their lows.
China / US trade negotiations remain the key issue for the global economy. Investors appeared to take comfort from indications that both sides recognise solutions will require time and effort, and are willing to defer damaging tariffs to allow room for what may be protracted discussions.
Oil prices defied another US inventory build to record a 1.6% gain. The rise is all the more curious in light of the pressure this puts on OPEC, as accompanying data showed US production remains at all-time highs. If OPEC doesn’t cut output prices may tumble, and if it does, US producers may grab market share
Another full day of company reports will keep Australian investors busy. Sixteen top two hundred companies report their half or full year results today, and once again early indications are for disappointment. Yesterday the Australia 200 index confounded positive international leads to close lower, and a similar risk exists today, subject to further releases.
CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
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.