Us equities managed a second day in the green after stock were buoyed by a positive energy sector which benefited from higher crude prices. The S&P500 gained 0.11%, the DJIA gained 0.2% while the NASDAQ 100 finished higher by 0.43%. In Asia, we saw mixed trading with only the ASX 200 managing a close in the green as an uptick in commodities led the index higher by 0.4%. The Nikkei 225 lost 0.5% while Chinese indexes were dragged lower as sentiment soured on the PBOC refraining from pumping liquidity into the market for the 5th day.
In FX, the greenback had a stellar couple of days with the USD Index recapturing the 100 mark thanks to positive rhetoric from several FOMC members who have not wavered form their hawkish stances. Also, keeping the Index bid, was weakens in the EUR and GBP with both currencies facing political pressures given the triggering of Article 50 by the UK, which officially started the divorce procedure for the two giants. Markets will be on the lookout for today’s US data with traders hoping for better than expected release as they look to capture the 100 mark outright and perhaps finish the week on a positive note.
In commodities, gold continues to consolidate, having formed a 4 day wedge which has been tightening significantly as a break-out nears. Positive USD data or more stability in markets will see bears try for a break to the downside while a weaker USD will see bulls push the upper bound in search for higher prices.
Crude oil traded back at the $50 mark as the commodity found support from the UAE`s announcement that they produced significantly less oil in line with efforts to suppress supply and push prices higher. Oil was further bid after we saw lower than expected Crude oil inventory builds out of the US. Crude prices will remain sensitive to data regarding demand and supply, with any news souring the outlook for demand or increasing the likelihood of an increased supply likely to see the black gold head south and vice versa if we see cause to price in a higher demand or lower supply.