Relief rally for stocks and oil heading into a flurry of US announcements
After being relentlessly pounded into the ground for several straight days, bulls finally mounted a strong enough comeback that was able to hold through the day. Markets had been getting oversold so some of the selling pressure may have finally been exhausted for now for now.
There were a number of positive reasons to spark bargain hunting from bulls including yesterday’s gains by mainland China indices, Crude oil holding the $30.00 round number again, JPMorgan beating the street on earnings and a bit less hawkishness from the Fed with St. Louis Fed President Bullard, a known hawk, indicating concern about inflation that could slow the rate hike path. Gold and JPY dropped back indicating capital has started to move back out of defensive havens and back in to stocks.
Soft guidance for 2016 from early reporters like Alcoa and CSX had spooked traders earlier in the week. Because of this, today’s report from Intel, also the first major technology company to report, may see its results and forecasts particularly closely scrutinized and could impact sentiment heading into today’s Asia Pacific trading.
In general, it’s a quieter day for Asia Pacific news, keeping China action front and centre with traders looking for signs of a turnaround. The big question of the day is was yesterday’s rallies in Shanghai and Shenzen a fluke or the start of a recovery? Can they make it two up days in a row? If so, can renewed enthusiasm spread to other markets? Singapore markets could be active around today’s retail sales report.
The approaching weekend may provide a particular test of confidence, particularly since it's a long weekend in the US. Because of the holiday, there are several US economic numbers coming out Friday, led by a key retail sales report which should give an indication of whether job growth and lower energy prices has converted into higher consumer spending or not. Considering the high volatility since the start of the year, how investors feel about holding positions over the weekend may indicate if the wave of selling and pessimism that greeted 2016 is over or not. .
After 4:00 pm EST Intel street $0.63
Significant announcements released overnight include:
UK interest rate and QE 0.50% and £375B, 8-1 vote no changes or surprises
Poland interest rate 1.50% no change as expected
Canada new house prices 0.2% as expected
US jobless claims 284K vs street 275K
US natural gas (168 BCF) vs street (177 BCF)
Germany GDP 1.7% as expected
Germany wholesale prices (1.0%) vs previous (1.1%)
Upcoming significant economic announcements include:
(Note: 11:30 am in Sydney/Melbourne is currently 1:30 pm in Auckland, 4:30 pm in Vancouver, 7:30 pm in Toronto/Montréal, 12:30 am in London and 8:30 am in Singapore)
8:45 am AEDT NZ food prices previous (0.2%)
11:30 am AEDT Australia home loans street (0.5%)
4:00 pm AEDT Singapore retail sales street 3.4%
4:00 pm AEDT Singapore retail ex auto street (1.7%)
8:00 am GMT Spain consumer prices street 0 0%
8:30 am GMT Sweden household consumption previous 3.3%
9:00 am GMT Norway trade balance previous NOK 15.4B
9:30 am GMT UK construction output street (0.1%)
8:30 am EST Canada existing home sales previous 1.8%
8:30 am EST US retail sales street (0.1%)
8:30 am EST US retail ex auto street 0.2%
8:30 am EST US producer prices street (0.2%)
8:30 am EST US core PPI street 0.3%
8:30 am EST US Empire Manufacturing street (4.0)
9:15 am EST US industrial production street (0.2%)
10:00 am EST US consumer sentiment street 92.9
9:00 am EST FOMC Dudley speaking
11:10 am EST FOMC Williams speaking