Markets Remain Subdued Ahead of Data
Global financial markets remained subdued in trading yesterday ahead of key data later in the week. The 3 major US indices again had relatively quiet days, although the Nasdaq did find some legs to close up 0.37%. The S&P also had a positive day, closing 0.17% in the black, whereas the Dow dropped lower, losing 0.25%. The Dollar was also very quiet, with most of the majors trading at very familiar levels. US Treasury yields remained solid, the 2-year holding near recent highs, closing at 4.718% and the 10-year grinding higher by 2 basis points to hit 4.319%. Oil prices were a bit more perky, Brent gaining 1.4% up to $83.65 and WTI notching up another 1.7% to $78.87 per barrel. Gold remained rangebound in line with the general dollar malaise, closing the New York session at $2,030 an ounce.
Oil Prices Bid on Supply Concerns
Oil prices jumped again yesterday as rumours hit the market that OPEC+ are considering extending output cuts further into the year. Both Brent and West Texas Intermediate pushed higher again in trading yesterday as supply side concerns – the potential OPEC+ cut and further tensions in the Red Sea – combined with potential demand increases from the Far East. Chinese markets saw an increase in demand from improved travel numbers over the lunar new year has led to some optimism that the world’s second biggest economy will lift its consumption faster than previously expected. Traders will continue to keep a close eye on newswires as the trading week progresses with Middle East developments still very much in focus. Support for WTI now sits around the $75 level with resistance at the 2024 high just under the $80 level, with a breakthrough there opening the way for a new range of $80-$85 per barrel.
The Trading Week Really Starts Today!
As expected, it has been a relatively quiet trading week so far but, the event calendar starts to heat up from today and there is an early focus on the Antipodes in the Asian session. First up the Aussie market has key CPI data due with householders hoping for a lower print to put some pressure on the RBA to start cutting rates in the near future. The focus then swiftly jumps across the Tasman for New Zealand’s latest cash rate call, with sticky inflation leading to the possibility of a surprise hike from the RBNZ. The European session is once again quiet in terms of economic releases, but US traders will have more tier 1 data to digest, with the latest Prelim GDP numbers due out as well as fresh inputs from the FOMC’s Bostic and Williams.
