Originally published by Rivkin Securities
The FTSE, DAX, S&P 500 and Dow all rallied confidently into their closes overnight, as the US Dollar Index remained close to its year-to-date lows and the dean of Columbia Business School (who is being pushed by Trump as the next Fed Chair) publicly detailed his belief in Trump’s plan for economic growth. Glenn Hubbard said that the Trump administration’s policy changes would significantly improve US growth prospects – well, what else would a guy say who is vying for the world’s most prestigious reserve banking job… But anyway, it may have been cause for a little optimism for those investors looking for smooth policy implementation, and likely formed part of the support for US equities last night.
US traders may have been getting a little worried that the party investment banks have been enjoying was coming to an end after some disappointing fixed income trading figures from Goldman Sachs (NYSE:GS) were released; however, most US bank earnings have been quite positive – it’s just that Wall Street analysts have come to expect such wonder from this sector that they decided to judge it harshly. As a result, financials were the laggards last night, while energy and materials came out on top – this bodes pretty well for Australia’s oil explorers and base metals names. The oil price rose last night, and iron ore has continued to rally to see it settle above US$70.20 a tonne.
Overnight traders have bid the S&P/ASX 200 futures 25 points higher and we should be set for a strong start, and this also goes for every other equity market in the Asia Pacific region. As I will continue to reinforce, a sustained move lower in the strength of the US dollar is great for Asia. Expect the market to be a little tentative, however, until the 11:30am release of Australian employment data.
There is a lot of data out today, all AEST:
- Thursday AM Bank of Japan Monetary Policy & Outlook
- Thursday 11:30 Australian employment report (headline rate of 5.6% unemployment expected)
- Thursday 16:30 Bank of Japan press conference
- Thursday 21:45 European Central Bank rate decision