Stock markets moved higher overnight, as jitters over the Israel-Hamas war continued to ease and traders trimmed expectations for further rate hikes in the US. There were also reports of further and more comprehensive stimulus measures for China, although while the Hang Seng rallied, the CSI 300 managed only fractional gains. European futures are in the red, after a broad rally yesterday. US futures are narrowly mixed.
Germany: HICP is still nowhere near the 2% target and with oil prices already backing up again, and wage growth still high, inflation is likely to continue to overshoot target for the foreseeable future.
- USDIndex: At 105.95, after correcting on dovish leaning Fed comments yesterday. The USDJPY recovered to 148.92 from 148.16 lows.
- Stocks: Treasury yields continued to drop and Wall Street extended recent gains amid rising expectations the FOMC is done. A haven bid has helped support Treasuries too. Wall Street climbed with the US100 rising 0.58% while the US500 advanced 0.52%. The US30 improved 0.4%. Gains were broad-based.
- Oil prices have continued to nudge down from the high of $87.24 per barrel seen early on Monday as markets continue to weigh the impact of Hamas’ attack on Israel over the weekend. USOIL is currently at $84.50, UKOIL at $87 per barrel. The direct impact may be limited, but there remains concern of a widening of the conflict and escalating tensions across the Middle East. If evidence of direct involvement from Iran is found, US sanctions on Teheran could also be tightened. Iran has raised production to a five-year high, but most oil is being shipped to China. Meanwhile, Reuters reported that Venezuela and the US have made progress in talks that could provide sanctions relief to Caracas by allowing at least one additional foreign oil firm to take Venezuelan crude oil – under certain restrictions.
- Gold gained more than 2% yesterday and another 0.39% so far today, at $1868 as haven flows spiked.
Today: US PPI & FOMC Minutes.
Interesting Mover: COCOA up by 1.25% to 3473 retesting the upper line of 12-day channel.
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Andria Pichidi
Market Analyst
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