0800hrs UK EU The ECB’s Benoit Coeure speaks in Cernobbio, Italy
1100hrs UK EU Bank of Spain Governor Luis Linde speaks in Lisbon
1310hrs UK NO Norges Bank Governor Oystein Olsen speaks in London
1330hrs UK NO Norwegian Finance Minister Siv Jensen speaks in London
1330hrs UK US Non Farm Payrolls (est 184.89K vs previous 287K)
1330hrs UK US Unemployment Rate (est 4.01% vs previous 4.1%)
1330hrs UK US Hourly Earnings (est 0.25% mom/2.73% yoy vs previous 0.1%/2.6%)
1615hrs UK UK Bank of England Governor Mark Carney speaks in Amsterdam
1830hrs UK US Federal Reserve Chairman Jerome Powell speaks in Chicago
2100hrs UK US San Francisco Fed President John Williams speaks in Santa Rosa, California
STOCKS: The Dow and the S&P posted gains for the third day on the trot yesterday, the longest streak in about a month as investor worries of an escalating trade conflict between the US and China eased and focus turned to upcoming earnings. The VIX volatility index closed down 1.12 points at 18.94, its lowest close in more than two weeks. The S&P500 traded positively all day, but bounced up and down to close +18.15 at 2662.84, the Dow following a similar pattern to end +240.92 at 24505.22, whilst the Nasdaq100 tech barometer did print -ve around the European early evening, before closing 34.779 to the good at 6594.838
However the relief could be short lived as overnight trading turned south rapidly as Asian markets opened as China said it would counter US protectionism “to the end and at any cost” as a war of words over President Trump’s proposed tariffs escalated after Trump ordered his administration to consider tariffs on an additional $100bln of Chinese goods. This caused S&P futures to drop around 1.6% almost instantly on the Asian open before a slight rally. The knee jerk reaction on the open faded as the Asian trading day moved on. By mid afternoon, Japanese stocks were only slightly lower on the day, whilst Hong Kong shares showed gains as they played catch up after a holiday.
US TREASURY: Treasuries advanced across the curve on the US-China spat. Yields dropped but movements were tempered by thoughts that the US & China will reach a compromise. Inflows in to Treasury funds jumped to the biggest level in the past two years, with some $4bln invested in US Treasuries in the week to April 4th, whilst $7.2bln was withdrawn from stock funds, with Japanese and emerging market stocks seeing inflows
OIL: WTI Crude futures headed for their worst week in a month, falling as much as 1.1% for a total drop of around 2.7% on the week. The futures are struggling to push through the $64 mark whilst Brent futures cannot seem to get through the $69 level.
GOLD: The yellow metal benefitted as Trump’s new salvo fuels trade war fears. Bullion ticked up 0.5% to $1332.57/oz in Singapore, whilst CME Jun Futures currently trade a fraction up at $1329.1
FX: A recovery in AUD/USD to 0.7673 may be a sign market participants are not convinced that protectionist US/China trade policies will be enough to derail the global economic expansion. AUD/USD is expected to trade in a range for the near futures. The Yen snapped a 3 day decline, rising against most of it’s G-10 peers as risk aversion returned. The Swiss Franc also gained ground. USD/JPY was up 1% on the week after a 1.5% gain last week and is set to post it’s best rally since September. Sterling’s bumpy ride since the end of January has done little to alter the view of analysts with polls looking for the GBP to trade up to between 1.42 and 1.46 by year end