Stock market today: S&P 500 in fifth straight record close as earnings shine
Risk aversion kept trading volumes low as investors prepare for key events later this week. Markets turn their focus on the Bank of Japan and Federal Reserve policy meetings.
It was a fairly quiet Asian session as Tokyo was on holiday today and the economic calendar was light. The yen saw some strength as it was supported by the demand for safe haven assets.
The dollar/yen pair edged lower to 101.98 yen, trimming its gains made on Friday after US inflation data. CPI beat expectations to rise 0.2% in August month-on-month. The US inflation data suggested a greater probability of a December Fed rate hike. The chances of a rate hike this week are low given a string of weak US data recently, particularly the ISM data and the retail sales numbers.
The Australian dollar was one of the best-performing major currencies during the Asian session, gaining 0.6% at $0.7539. The new RBA Governor Philip Lowe started work at the Australian central bank today and reiterated the RBA’s commitment to meet the inflation target of 2-3%. The aussie received an added boost after housing data out of China, which is Australia’s largest trading partner. Data showed house prices in China rose 9.2% year-on-year in August, beating July’s 7.9% expected increase.
The euro bounced from Friday’s two-week low of $1.1149 and hit a session high of $1.1172.
Sterling bounced off a one-month low against the dollar. After opening in Asia just under the key $1.3000 level, the pound edged higher during the session to reach $1.3046.
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In commodities, oil rose amid reports that OPEC may call a formal meeting if an agreement is reached at the informal meeting of oil ministers in Algiers on September 27 to freeze production. There is growing speculation that oil producers, which include Saudi Arabia and Russia, will agree to cap output in an effort to help oil prices rise. Meanwhile, news of clashes in Libya raised concerns that oil exports would be disrupted.
WTI crude oil futures rose to $43.90 a barrel in Asian trading today, moving off one-month lows of $43.08. Brent crude jumped to $46.49 from lows of $45.47 a barrel.
The economic calendar is looking light today, with only Eurozone current account data to focus on in the European session and the NAHB housing market index out of the US later on today.
The market’s main focus will be on the Fed and BOJ policy announcements on Wednesday. Therefore, moves in the currency markets could be very limited today and tomorrow.
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