S index futures are trading marginally lower this morning as they consolidate yesterday’s gains and traders await this morning’s ADP private sector payrolls report for confirmation or rejection of the recent string of stronger than expected US and Canadian economic reports. Super Tuesday voting results showed Donald Trump and Hillary Clinton increasing their leads for party nominations in this year’s Presidential Election race.
In overnight trading, Asia Pacific markets staged big gains with the Nikkei
rallying 4%, the hang Seng gaining 3% and the Australian market gaining 2%. Bullishness came from a combination of a catch up rally, a decline in the Yen taking the pressure off of Japanese stocks and Australia joining the US and Canada in posting much stronger than expected GDP. Mainland China indices rose 4-5% shrugging off Moody’s cutting its outlook on Chinas credit rating to negative from stable, indicating traders are more enthusiastic about stimulus efforts and also how much respect the credit agencies have lost through the crises of the last decade.
Crude oil has dropped back overnight with WTI losing 2% but holding above $33.00 following a big increase in API oil inventories. Gasoline, meanwhile is up slightly after API gasoline inventories fell more than expected. As we know, API hasn’t been as effective an indicator leading into DOE inventories lately so we could still see surprises and activity in the oil market later this morning.
Currency trading finds CAD trading down slightly in a normal correction of yesterday’s big breakout rally and reacting to the pullback in oil. Cable (GBPUSD
) is challenging $1.4000 again. AUD has having a strong day boosted by its GDP reports.
There have been no major corporate announcements in North America so far this morning.
Significant announcements released overnight include:
US API crude oil inventories 9.9 mmbbls vs street 2.3 mmbbls
US API gasoline inventories (2.2 mmbbls) vs street (1.8 mmbbls)
Super Tuesday results from 13 state caucuses and primaries
Trump 285 delegates after winning 7 states incl Virginia, Georgia and Massachusetts
Cruz 161 delegates after winning 3 states incl Texas and Oklahoma
Rubio 87 delegates after winning Minnesota
Clinton 544 delegates after winning 7 states incl Texas, Georgia, Virginia
Sanders 349 delegates after winning 4 states incl Colorado, Oklahoma, Vermont
Australia Q4 GDP 3.0% vs street 2.5%
UK construction PMI 54.2 vs street 55.5
UK BRC shop prices (2.0%) vs previous (1.8%)
Spain unemployment change 2K vs street 8K and previous 57K
Eurozone producer prices (2.9%) as expected
NZ QV house prices 11.6% vs previous 12.6%
Australia new home sales 3.1% vs previous 6.0%
Upcoming significant announcements include:
8:15 am EST US ADP Payrolls street 188K vs previous 205K
9:45 am EST ISM New York previous 54.6
10:30 am EST US DOE crude oil inventories street 3.3 mmbbls
10:30 am EST US DOE gasoline inventories street (1.5 mmbbls)
11:00 am EST FOMC Williams speaking
2:00 pm EST US Beige Book
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