US Stocks Remain at Highs – S&P another Fresh High
US stock markets took another step higher yesterday with the S&P notching up a second successive record high. Bets for a March rate cut have now dropped below 50% and investors are now focusing on the strong data still coming through and are taking equities higher. The Dow gained 0.4% yesterday, followed by the Nasdaq which added another 0.3% and the S&P which pushed 0.2% higher to hit a new record close. US Treasury yields fell back off of recent higher levels, the 10-year lost 5 basis points and the 2-year dropped 2.5 basis points, now trading at 4.10% and 4.38% respectively. Currencies traded in familiar ranges, but traders are expecting that to change swiftly as the event calendar picks up from today. Oil jumped 2% as supply concerns increased after a drone attack in Russia and Gold dropped back down to the $2,020 level.
Bank Of Japan First Up Today
The Bank of Japan is the first cab off the rank today as traders gear up for a heavy week of central bank action. In common with the Bank of Canada and the European Central Bank, both due to set rates this week, it is not expected to change rates at the conclusion of this meeting. However, the message that it gives the market should see plenty of volatility across markets, especially in the Jpy which has whipsawed over recent months on potential rate hike expectations. Those expectations have been pulled back by BOJ officials recently, and some investors are expecting more hawkish rhetoric today as UsdJpy is not far off the 150 level, but the market is still confident that we may see the first hike from the BOJ since 2007 by April this year. As usual there is no set time for the announcement, but traders will be paying close attention to their screens as it approaches midday in Tokyo.
Central Banks in Focus from Today
Global financial markets are set to start their trading week in earnest today as the event calendar kicks into gear. Once again, we saw another bullish session in US markets yesterday but the focus in Asia will be firmly on Japan once it opens today. The Bank of Japan is set to deliver its latest rate update and traders are expecting plenty of volatility around the event. Theres it little again on the calendar in the European session although traders will take note of the European Consumer Confidence print later in the day. The New York session see’s the release of the latest Richmond Manufacturing Index data and antipodean traders will note that there will be early focus on New Zealand tomorrow with the release of key CPI numbers early in the APAC day.
