sluggish start to the month for US stocks finished well as US indices gained strength through the day, following their continental counterparts and finished strong, sending positive momentum towards Asia Pacific markets trying to shrug off yesterday’s early weakness.
US manufacturing PMI were right around expectations with slightly stronger Markit offsetting slightly weaker but still above 50 ISM. Similarly in the ISM data, stronger new orders offset weaker employment. Overall, there was nothing to suggest the US economy is falling off the rails enough to stop the Fed from raising rates so the bulls won out in the end after a tough early battle.
In stocks, the big news of the day was the trading debut of Hewlett Packard as two separate companies. The most interesting part of this was that HP Inc. the traditional PC and printer business rallied 12% on its debut and broke out of a head and shoulders base. This suggests that on its own, the base business has attracted interest from value players.
Currency markets have been relatively steady but could get more active today, particularly AUD and NZD around the RBA meeting and New Zealand inflation data. Singapore PMI numbers come out overnight and may have a bigger impact on Wednesday trading.
Last week, the RBNZ held interest rates steady and the RBA is expected to do the same even though Australia data has remained soft over the last month. Australia data has been soft since the last meeting with PMI, inflation and employment all falling but likely not enough to spark action this time around.
It will be interesting to see if the RBA hints toward further rate cuts in the statement or stays in neutral. AUD rallied after last meeting but has given most of that back already. Traders may also be looking to see if the RBA tries to talk down the dollar after the RBNZ declined to mention the currency in its last statement. Any dovish hints or actions (a rate cut would be seen as a big surprise to the street) could drive AUD back under $0.7000 while neutral to hawkish words or deeds could spark a rebound in AUD.
Allstate $1.52 vs street $1.31
Significant announcements released overnight include:
US Construction Spending 0.6% vs street 0.5%
Manufacturing PMI reports:
US Markit 54.1 vs street 54.0
US ISM PMI 50.1 vs street 50.0 vs previous 50.2
US ISM new orders 52.9 vs previous 50.1
US ISM employment 47.6 vs previous 50.5
Canada RBC 48.0 vs previous 48.6
UK 55.5 vs street 51.3
Germany 52.1 vs street 51.6
France 50.6 vs street 50.7
Spain 51.3 vs street 52.0
Italy 54.1 vs street 53.1
Sweden 53.5 vs street 53.8
Norway 48.3 vs spreet 46.5
Poland 52.2 vs street 51.5
Greece 47.3 vs previous 43.3
Upcoming significant economic announcements include:
10:00 am AEDT NZ QV house prices previous 12.6%
11:00 am AEDT NZ ANZ commodity prices previous 5.5%
2:30 pm AEDT Australia RBA interest rate 2.00% no change expected
12:00 am AEDT Wed Singapore PMI street 48.9
12:00 am AEDT Wed Singapore electronics sector street 49.0
8:00 am GMT Spain unemployment change street 71K
9:30 am GMT UK construction PMI street 58.8
10:00 am EST US factory orders street (0.9%)
10:00 am EST US factory orders ex transport previous (0.8%)
12:00 pm EST SNB Jordan speaking
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