US and European indices were steady to start the week with the Dow and S&P posting small gains while the Dax
and FTSE posted small losses. It was a relatively quiet day for economic news on both sides of the Atlantic and traders appeared to be digesting last week’s central bank news and preparing for tomorrow’s flurry of announcements.
Apple had an up and down day starting out with a rally but then turning sharply downward after announcing smaller and cheaper versions of its iPhone and iPad and a price cut for the iWatch. Trades weren’t very enthusiastic about the news which suggests that the iWatch hasn't been doing as well as hoped. The shift from lower margin more mainstream priced products also indicates the growth potential in the high end has probably been tapped out.
In energy trading, WTI crude oil rebounded toward $40.00 while gasoline gained 1.5% as traders start to anticipate summer driving season. Natural gas, on the other hand failed to hold onto early gains and turned downward with traders recognizing the current cold snap as the last gasp of a weak home heating season.
The main action in currency markets today was a moderate 0.5% decline in GBP relative to USD and EUR. Uncertainty over a close Brexit vote and questions over the recent budget have been overhanging Sterling after Iain Duncan Smith, a former Conservative party leader, resigned his post as Works and Pensions secretary in opposition to a government plan to cut benefits for disabled people. There also have been suggestions Mr. Smith’s support for Brexit may have led to tensions with senior cabinet members as well. This development didn’t have a major impact on the FTSE which has been trading similar to US markets so far today. Sterling may remain active through tomorrow’s UK inflation reports.
Asia Pacific indices have continued to trend higher this morning as they try to catch up to the rebound gains made in other regions having lagged behind in recent weeks. A rebounding USD on comments from Atlanta Fed President Lockhart trying to put an April rate hike back on the table despite last week’s dovish FOMC signals has knocked JPY back taking some of the pressure off of Japanese stocks, while the India market continues to rally and Chinese markets benefit from the return of margin lending.
There are a flurry of economic surveys due over the next day or so, headlined by Flash PMI reports for Japan, the US, Germany and France which may give the first insight into how global economies are performing in March so far. Germany may attract particular attention with the ZEW investor and IFO business surveys also on the way.
There have been no major corporate announcements after the US close today
Significant announcements released overnight include:
US existing home sales 5.08M vs street 5.31M
UK Rightmove house prices 7.6% vs previous 7.3%
UK CBI total orders (14) as expected
UK CBI selling prices (1) vs previous (3)
Eurozone consumer confidence (9.7) vs street (8.3)
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)
1:00 pm AEDT Japan flash manufacturing PMI street 50.5
8:00 am GMT France flash manufacturing PMI street 50.2
8:00 am GMT France flash service PMI street 49.5
8:30 am GMT Germany flash manufacturing PMI street 50.8
8:30 am GMT Germany flash service PMI street 55.0
9:00 am GMT Germany IFO business climate street 106.0
9:00 am GMT Germany IFO current assessment street 112.7
9:00 am GMT Germany IFO expectations street 99.5
9:30 am GMT UK consumer prices street 0.4%
9:30 am GMT UK core CPI street 1.2%
9:30 am GMT UK retail prices street 1.3%
9:30 am GMT UK producer input prices street (7.4%)
9:30 am GMT UK producer output prices street (1.2%)
9:30 am GMT UK ONS house prices previous 6.7%
10:00 am GMT Germany ZEW current situation street 53.0
10:00 am GMT Germany ZEW expectations street 5.4
9:45 am EDT US flash manufacturing PMI street 51.9
10:00 am EDT US Richmond Fed street 0 vs previous (4)
12:30 pm EDT FOMC Evans speaking
4:00 pm EDT Canada Morneau federal budget