Financial Market Review for March 26, 2018 U.S. stock futures led global shares higher on Monday after reports that the United States and China have quietly started negotiations to improve the U.S. access to Chinese markets eased fears of a trade war between the two economic giants. E-Mini futures ESc1 for the S&P 500. SPX leaped more than 1 percent while Japan's Nikkei .N225 erased earlier losses of 1.3 percent to end 0.7 percent higher. MSCI’s broadest index of Asia-Pacific shares outside Japan. MIAPJ0000PUS was up 0.4 percent, flipping back to positive territory from a 0.5 percent fall. European shares ticked up on opening, with Germany's Dax .GDAXI, France's Cac. FCHI and Britain's FTSE. FTSE all about 0.3 percent higher. The Wall Street Journal reported U.S. Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer listed steps that Washington wants China to take in a letter to Liu He, a newly appointed vice premier who oversees China’s economy. Signs of talk between the two economic giants allayed fear of an escalating trade war, sparked after U.S. President Donald Trump moved to slap tariffs on Chinese goods, on top of import duties on steel and aluminum, prompting a defiant response from Beijing. Economic data released through the Asian session this morning was limited to New Zealand’s February trade figures. Year-on-year, the trade deficit narrowed from a revised NZ$3,280m to NZ$3,020m, narrowing greater than to a forecasted NZ$3,225m deficit, while month-on-month, January’s revised NZ$655m deficit bounced to a NZ$217m surplus in February. The Kiwi Dollar moved from $0.72397 to $0.72328 upon release of the figures before making gains later in the morning, up 0.50% to $0.7269 at the time of writing, supported by the upbeat trade figures. Elsewhere the Aussie Dollar was up 0.31% to $0.7723, supported by last week’s pickup in commodity and oil prices and a pullback in U.S Treasury yields, while the Japanese Yen lost some ground, down 0.14% to ¥104.89 through the morning session. With economic data on the lighter side, the markets will be in the hands of Trump and China, with any more tariffs and more material retaliations by China likely to drive risk aversion to new levels. For the EUR, economic data scheduled for release this morning is limited to finalized 4th quarter GDP figures out of France that is forecasted to be in line with 2nd prelim figures. Barring a deviation from prelim numbers, the stats are unlikely to have a material impact on the EUR, with market risk sentiment through the day likely to be of greater influence. There will have been some relief last week that the EU was able to garner an exemption from the steel and aluminum tariffs. For the week ahead, any more talk of tariffs on EU car exports to the U.S would be the one to watch, together with any more retaliatory moves by China.
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Financial Market Review for March 26, 2018 At the time of writing, the EUR was up 0.18% to $1.2385. For the Pound, macroeconomic data is on the lighter side through the day, with stats limited to mortgage approvals that are unlikely to have an impact on the Pound, focus on the Pound will continue to be Brexit and the ongoing trade spat between the U.S and China that could spiral out of control at any time. At the time of writing, the Pound was up 0.25% to $1.4180, with the markets likely to be drip fed more summaries from last week’s Euro Summit to provide direction for the Pound on Brexit. Across the Pond, there are no material stats scheduled for release that will give February’s Chicago FED National Activity Index and FOMC members’ greater influence on the markets through the U.S session. FOMC members Dudley, Mester and Qaurles are scheduled to speak and there will be some interest, if any of the members suggest that the FED may need to hit the pause button in the event of a trade war. The U.S President has certainly achieved the goal of a weaker Dollar, though even the weaker Dollar has done little to stem the tide of demand for foreign goods through the year, as the goods trade deficit continues to widen. At the time of writing, the Dollar Spot Index was down 0.04% at 89.4, giving up gains from earlier in the morning, with the greenback in the hands of the U.S President and China, any moves by either side that are considered to be a negative for the respective economies, likely to also be a negative for the U.S Dollar. In commodities, international Brent crude futures LCOcv1 opened above $70 per barrel for the first time since January but the gains could not be sustained as the ongoing trade disputes weighed on global markets. [O/R] Spot gold went up and hit $1,350.00 an ounce. View our full economic calendar for a daily roundup of major economic events.
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