Dow Pushes Higher Again in Quiet Markets – Up 0.4%
As expected, financial markets experienced one of its quieter days yesterday with very little on the event calendar and in the news to inspire further moves. Stocks did however manage to retain recent gains and push higher on some of the indices, with European stocks (STOXX 600) closing at a record high and the Dow pushing higher for the sixth session in a row. The Dow finished up 0.44% on the day, nicely ahead of the tech-heavy S&P and Nasdaq which closed flat and up 0.18% respectively. The dollar edged higher against the majors with the Dxy up 0.18%, the Yen again noticeably weaker. Oil prices firmed again as US crude stocks dropped, Brent up 0.5% to $83.58 a barrel and WTI up 0.8% to $78.99 a barrel whilst Gold remained in familiar ranges finishing the day at a similar rate as yesterday around $2,310 an ounce.
Bank Of England in Focus Today
Investors are expecting the Bank of England to keep the Official Bank Rate unchanged at 5.25% today but will be looking closely at the voting statistics and messages from the Summary and Policy Report on the initial announcement. Markets are fully pricing in a rate cut from September, but if we see more than one member voting for an easing in this meeting then expect that pricing to move closer and for yields and the pound to come under pressure. The UK’s inflation did slow marginally less than expected in March, down to 3.2% from 3.4% but MPC members have made it clear that they feel the outlook is on track with their forecasts and some traders think this opens the way for a move dovish ‘hold’ than the market is currently pricing. If this is the case, FX traders will be looking for substantial downside in the Cable in particular as the respective central banks diverge on the anticipated speed of rate cuts.
Markets Set to Pick Up Today Despite Euro Holidays
Asian markets are set to kick off the day in a relatively subdued manner today after another fairly quiet day on Wall Street. However, the event calendar does pick up somewhat from yesterday’s bare cupboard. Yen traders will look harder than normal at the BOJ’s Summary of Opinions report early in the Asian trading day given recent intervention plays before the focus moves to China for the latest Trade Balance data. The focus on the European Open will be firmly on the UK with most of the continent on holiday and the latest Bank of England rate announcement due out midway through the session. The New York session has the usual weekly unemployment claims data scheduled as well as the 30-year Bond Auction later in the day.
