A Better Trading Session for Stocks

March 28, 2017

Only a few insignificant data reports have been released in Asia and Europe.

Markets are viewing the implications of the U.S. healthcare bill fiasco on other Trump Administration legislative plans with less alarm and took advantage of the softer dollar and lower long-term interest rates to rebuild equity positions.

Renewed confidence in the buoyancy of U.S. stocks lifted other equity markets as well. Japan’s Nikkei closed up 217 points or 1.1%. Stocks climbed 1.3% in Australia, 0.7% in Hong Kong, 1.0% in Singapore and 0.6% in India. Equities in Europe are unchanged in the U.K. and France but up 0.6% in Germany, 0.3% in Spain and Italy and 1.9% in Greece.

West Texas Intermediate crude oil rose 0.8% to $48.09. Gold edged down 0.2% to $1,256.90 per ounce.

The dollar recovered 0.4% relative to the kiwi, 0.2% versus the loonie, Aussie dollar and yuan, and 0.1% against the euro and Swissie but dipped a further 0.1% versus the yen and peso. Sterling is unchanged. Prime Minister May invokes Article 50 of the Lisbon Treaty tomorrow, and Japan’s government fiscal year ends on Friday.

The 10-year German bund yield dipped a basis point, while its British counterpart edged up a basis point. Japan’s JGB is steady.

Speculation the South African Prime Minister Zuma is about to dump Finance Minister Gordhan depressed the rand almost 1%.

The Trump team and Republican-controlled Congress are moving forward on tax reform, building a Mexican border wall, abandoning U.S. participation in the Paris Climate Accord, and confirmation of Gorsuch to fill the Supreme Court vacancy.

Scheduled U.S. data releases today include the Richmond and Kansas City Fed manufacturing indices, the Case Shiller house price index, and the Conference Board’s consumer confidence index.

Italian industrial orders dropped 2.9% in January after posting gains in each month of last quarter. Orders were 8.6% higher than a year earlier. Industrial sales slumped 3.5% on month, slashing their 12-month rate of increase to just 1.5%.

Swedish retail sales growth slowed to 0.2% in February. There was a 2.7% rise from a year earlier. Swedish PPI inflation slowed to 7.5% in February from 8.2% the month before, and the Swedish trade account had a SEK 1.0 billion  seasonally adjusted surplus in February.

The Dutch current account surplus widened 44% on quarter to EUR 17.9 billion in 4Q. Mexico posted a $398 million trade deficit last month following a $3.29 billion deficit in January and a mere $28 million surplus in December.

Business sentiment in Turkey printed at 106.7 in March, marginally above the February reading of 106.5.

Copyright 2017, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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