US markets remained closed yesterday in observance of Memorial day with most of the volatility coming in the Asian session where optimism in Chinese markets bolstered sentiment in the region with most bourses closing in the green after PBoC upped its liquidity injections and increasing the prospects of MSCI inclusion which would increase the demand for stocks in the region. The Nikkei 225 gained 0.5%, the ASX 200 was the major loser, shedding 0.4% as energy and retail names disappointed. The Shanghai Comp gained 2.1% and the Hang Seng gained 1%.
In Fx, the GBP strengthened overnight as the latest polls show 51-46 in favour of staying in the EU, the gains have been short lived as month-end book adjustments see the GBPUSD back at its opening price, over 80 pips from the high. The AUD gained a massive boost overnight with the AUDUSD gaining around 70 pips as better than expected data has the Australian economy improving with the likes of Building Approvals coming in at 0.7% vs an expected decline of 6.7%.
In commodities, oil traded in a tight range as market take a cautious tone ahead of this week’s OPEC meeting. Gold lost some ground overnight (-0.2%), giving back some yesterday’s gain of 1%.
Significant data is expected today (see below), which is likely to cause a stir in markets as traders take advantage of the volatility.
- Core PCE Price Index m/m expected at 0.2%
- Personal spending m/m expected at 0.7%
- Chicago PMI expected at 50.8
- CB Consumer Confidence expected at 96.1
- GDP m/m expected at -0.1%
- German Retail Sales m/m expected at 1%
- German Unemployment Change expected at -4K
- M3 Money Supply y/y expected at 5%
- CPI Flash Estimate expected at -0.1%
- Core CPI Flash Estimate expected at 0.8%
- Manufacturing PMI expected at 50
- Non-Manufacturing PMI previously at 53.5
- Caixin Manufacturing PMI expected at 49.3
- GDP q/q expected at 0.6%