Spreadex Market Update
Better China Data Overnight Keeps Risk Flames Burning
European Equities Remain Top of Pack
Equities markets pushed on yesterday. Gains remain strongest in Europe where a combination of plunging energy prices (gas hit 16-month lows yesterday) and the peak inflation narrative are helping bolster sentiment. Similarly in the UK, recent GDP showed that activity avoided falling into contractionary territory last month. The Nikkei is rebounding sharply this week, up almost 2% off yesterday’s lows amidst a fresh round of bond purchases from the BOJ ahead of its keenly awaited policy meeting tonight.
Goldman Due to Report
In the US, earnings season rolls on today with Goldman Sachs, Morgan Stanley and United Airlines among the key names reporting. On the back of bumper earnings reports from the likes of JPM and Citi last week, expectations are bullish for financials today which, if confirmed, should help drive equities indices higher still.
Risk Currencies Roaring Back
The pop higher in USD yesterday has caused a little hesitance across the FX landscape though with the greenback seeing a softer start today, we are seeing signs of life elsewhere. Risk currencies are being broadly supported by the gains in equities prices with NZD surging back into demand this week. CHF has also seen a fresh uptick in demand following a few subdued sessions amidst recent EUR strength.
UK Wages Rise Above Forecasts
In the UK, the latest labour market data today showed that wages were seen rising 6.4% over the last 3-month period, above forecasts. The data suggests that inflation might be a little stickier than expected at current levels. The unemployment rate was seen holding steady at 3.7%. GBP has been mostly firmer on the back of the data
Metals & Oil Limited By Fresh USD Gains
In the metals and commodities space, gold and silver were seen reversing from recent highs yesterday as fresh strength in USD curtailed the rally. Crude prices are also under selling pressure today following a decent rally yesterday. If USD strength materialises again today this will likely drag both metals and crude lower still.
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