Stocks And Bond Yields Rise On European Economic Data
MarketPulse | Apr 03, 2019 08:18AM ET
Global stock markets are mostly positive after a wrath of European economic data showed the eurozone had strong rebounds in the service sector. The S&P 500 futures are 0.5% higher, while the yield on the 10-year US Treasuries is 7.5 basis points higher at 2.513%. Risk appetite also benefited from optimism that the next round of trade talks in Washington DC will bring the US and China closer to a deal. Safe-haven currencies gave back most of their gains from the start of the trading week
- EUR – 1.12 holds after better than expected data
- Brexit – May to meet Corbyn
- Oil – Awaiting DOE inventory data
- Gold – Hovers near $1,300
- Bitcoin – Makes new 2019 high as volatility returns
The euro is staying in its tight range and rallied above the 1.12 level after a round of service sector data painted a picture that Europe could be showing signs of stabilization. Spain, Italy, Germany and the eurozone all had better than expected readings, while France confirmed the move back into contraction.
The German 10-year bund also turned positive on the renewed recovery expectations. The rebound in China still remains key for Germany and that is expected to show signs of improvement if we continue signs progress with China-US trade talks.
PM May is expected to meet Labour leader Jeremy today. The first time they scheduled a meeting, Corbyn walked out, but this one should go differently. PM May appears she is willing to do anything now to break the impasse on the withdrawal agreement. A short or long extension is what appears to be the likely outcome since PM May will struggle to get Labour and her Conservatives to agree on all aspects of a new deal. Corbyn has been supportive of the customs union and it appears PM May will consider Labour’s wish list as she tries to get any deal done now.
The outcome of the Corbyn meeting could be more political gamesmanship or we could see the Labour leader call a general election.
Get The News You Want
The oil rally is slowing down, but that could be temporary. Yesterday, the API weekly reading showed a slight build and that really just triggered some profit taking in the short term. If we do not see a major build with the DOE crude oil inventories later today, we could the bullish move reassert itself.
Expectations are for the DOE inventories is for a draw of 591K barrels. Once we get passed the inventory data, markets will focus more on the growing belief that the Trump administration will renew the sanction waiver on Iranian crude for China and India, and this should be the next key catalyst for higher oil. The production cuts by OPEC + are providing a nice backdrop here for higher prices until we see US production ramp up again.
Brent has not traded above $70 a barrel since November 12th and we may need to see a positive update on the trade front to help trigger the move higher today.
Gold prices are slightly firmer on the day, despite today’s general upbeat tone in markets. Trade talks between China and the US resume in Washington DC today and we could see positive updates continue to weigh on the precious metal.
Bitcoin is back in the headlines after making a new high for 2019, this followed yesterday’s out of nowhere surge. The virtual currency has recently benefited from a decline in volatility, which was supported for a slow steady climb higher. If roller-coaster conditions return, we could see that remain negative for the cryptocurrency. Cryptos have failed to gain traction in getting an ETF established and until we see that, we may see institutional money remain on the sidelines.
Original post
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.