Opening Bell: Global Stocks Caught Between Fed Hopes And Trade Ambiguity
Investing.com | Mar 20, 2019 09:18
- U.S. futures waver ahead of Fed's rate, dot-plot announcement
- Europe dragged lower by Bayer (DE:BAYGN), energy firms setbacks
- Asian, U.S. indices take a hit from contrasting trade talks reports
- Iron ore falls ahead on prospect of new Brazilian mine projects h2 Key Events/h2
- The Fed is expected to hold interest rates steady on Wednesday. It is also expected to announce it will stop rolling off assets from its balance sheet, and to lower projections for the number of rate hikes for the year.
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Canadian ADP Nonfarm Employment Change is released Thursday.
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Canadian Wholesale Sales for January are released Thursday.
- Central banks in Indonesia are all scheduled for policy meetings this week.
- In the euro zone, PMI numbers out on Friday will give an indication on the health of the region’s service sectors at the end of the first quarter.
- Micron Technology (NASDAQ:MU) (NASDAQ:earnings after market close on Wednesday. Analysts see a $1.66 earnings with a $5.86 billion revenue.
- Nike (NYSE:NKE) (NYSE:growth momentum remains on an upward trajectory.
- Tiffany & Co (NYSE:TIF) (NYSE:earnings before market open on Friday, with a $1.6 EPS and $1.34 billion forecast.
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Canada’s S&P/TSX Composite closed down 0.39 percent Tuesday.
- The STOXX 600 saw the first retreat in more than a week.
- The MSCI Asia Pacific Index dipped 0.1 %.
- The MSCI Emerging Market Index slipped 0.1 %.
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The Canadian loonie was steady against the U.S. greenback early Wednesday, trading at 0.7507.
- The Dollar Index advanced 0.16 %, where it’s trading at the height of the session.
- The euro gave up less than 0.05 % to $1.135.
- The Japanese yen slid 0.2 % to 111.56 per dollar.
- The MSCI Emerging Markets Currency Index gained less than 0.05 % to the highest in three weeks.
- The Australian dollar dropped less than 0.05 % to 0.709 per dollar.
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Canada’s 10-year yield was up early Wednesday at 1.732, a 0.23-percent increase.
- The yield on 10-year Treasurys fell one basis point to 2.60 %.
- Germany’s 10-year yield increased less than one basis point to 0.10 %, the highest in two weeks.
- Britain’s 10-year yield decreased less than one basis point to 1.184 %, the lowest in more than a week.
- The spread of Italy’s 10-year bonds over Germany’s declined less than one basis point to 2.394 %age points.
- The Bloomberg Commodity Index dropped less than 0.05 %.
- LME copper declined 0.1 % to $6,452.50 per metric ton.
- Gold fell 0.2 % to $1,303.92 an ounce.
Global stocks halted their rally this morning as trade uncertainty retuned to markets after reports of a lack of co-operation by Chinese negotiators. Futures on the monetary policy announcement , amid mounting hopes that the central bank's dot plot projections would strengthen the case for a slower path to tightening.
The BAYGN ) plunged over 12%, nearly wiping out all of this year’s profits and heading for the biggest drop in 15 years, after the multinational firm suffered a setback in a trial over claims its Roundup weed killer causes cancer.
In the earlier Asian session, equities opened lower after reports that China has beenare going very well ” may have eased some concerns.
China’s S&P/ASX 200 slid 0.32%.
Japan’s NASDAQ Composite (+0.12%), on the conflicting U.S.-China trade reports.
The Consumer Discretionary (+0.5%). Technically, the pushback came within 1% above the October-November peaks, as the 50 DMA approaches the 200 DMA.
The Dow Jones Industrial Average slipped 0.1%. Technically, the price found resistance by the February peak, as the 50 DMA attempts to scale above the 200 DMA.
The USD fell to the lowest level of the month on speculation of a dovish fed—a tailwind for multinationals, which would attract more demand at the expense of domestic firms.
UST 10-Year Daily Chart
Meanwhile, yields on lower rates on the horizon, which would make current bonds more attractive. Technically, yields are developing a pennant continuation pattern—something to be expected they completed a symmetrical triangle, which itself followed the violation of the long-term uptrend line since July 2016.
DXY Daily Chart
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Technically, however, we have been pointing out for some time that the 1.3% drop since March 7 should be viewed in the prism of a correction within an uptrend, with the 200 DMA drawing an organic uptrend line, as well as ascending channel bottom. The RSI confirms that momentum supports the price movement, also suggesting that the dollar will continue to climb. If not from the outlook for higher rates, the greenback is likely benefiting to its safe-haven status.
Sterling dropped, perhaps signaling pessimism over Prime Minister Theresa May's quest for an extension on the Brexit deadline that could enable her to strike a final deal with parliament.
The euro held steady even after German produce inflation disappointed on inflation.
XAU Daily Chart
Gold futures fell today, ending a three-day straight advance and wiping out yesterday’s gain. Technically, the precious metal fell below the 50 DMA, as it forms the right shoulder of a H&S top.
VALE to restart a major mining project.
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