Advertisement
Singapore markets closed
  • Straits Times Index

    3,224.01
    -27.70 (-0.85%)
     
  • S&P 500

    5,250.45
    +1.96 (+0.04%)
     
  • Dow

    39,739.88
    -20.20 (-0.05%)
     
  • Nasdaq

    16,389.23
    -10.29 (-0.06%)
     
  • Bitcoin USD

    71,042.54
    +1,407.09 (+2.02%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,961.73
    +29.75 (+0.38%)
     
  • Gold

    2,226.00
    +13.30 (+0.60%)
     
  • Crude Oil

    82.32
    +0.97 (+1.19%)
     
  • 10-Yr Bond

    4.1980
    +0.0020 (+0.05%)
     
  • Nikkei

    40,168.07
    -594.66 (-1.46%)
     
  • Hang Seng

    16,541.42
    +148.58 (+0.91%)
     
  • FTSE Bursa Malaysia

    1,530.60
    -7.82 (-0.51%)
     
  • Jakarta Composite Index

    7,288.81
    -21.28 (-0.29%)
     
  • PSE Index

    6,903.53
    +5.36 (+0.08%)
     

Equity Indices Rebound, Trade Hope Returns To Fore, US Inflation Is

Global indices rebound in the wake of positive trade news and better than expected data in China, the EU, and U.S.

Asian Equities Rebound Strongly On Good News

Asian equity indices, led by mainland-China, were up after a round of positive news. News on trade, foreign investment, and economic data was all part of the mix. On the trade front, spirits were lifted late Thursday after Economic Adviser Larry Kudlow said last week’s negotiations were “fantastic”. According to him, major progress was made and that was later followed up by additional good news. Word from within the negotiation is that a draft document is being prepared for Trump and Xi to sign in mid-march. Details are not yet available to the nature of the deal.

The news had shares in Japan, Hong Kong, and Australia moving higher on Friday. The Nikkei was in the lead at 1.02% with shares of Softbank leading the broader Japanese market. The Hong Kong Hang Seng was up a more tepid 0.45% while the Australia ASX was up 0.38%.

Mainland Chinese shares received an additional boost from today’s Caixin PMI reading and an announcement from MSCI. The reading came in at 49.9 showing the third month of contraction within China’s economy but was better than expected. MSCI announced that it would increase the weighting of mainland China A-shares in its global indices later this year. The indexing firm says the weighting will increase from 5% to 20% quadrupling current exposure. Analysts say the move could mean $80 billion in foreign inflow to China’s equity market.

Trade Hope Lifts Market In EU

European markets were also able to rebound in Friday trading. The DAX was in the least at midday with a gain of 1.25% while the UK FTSE and French CAC were trading with gains near 0.60%. The move is driven by trade hopes and new data showing inflationary pressure, and by extension economic activity, is still feeling upward pressure. The all-EU CPI came in at 1.5%, up a tenth from last month, and better than expected. The core reading is more tepid at 1.2% but also showing upward pressure.

ADVERTISEMENT

Autos were in the lead at midday after news from Faurecia it was expanding into Japan. Shares of its stock advanced more than 5.0%. Shares of WPP were also sharply higher after announcing a major restructuring effort. Moncler led the pack though after it released earnings. Analysts at Jeffries say the results are remarkable and shares moved up by 11%.

U.S. Futures Rise As Optimism Grows

U.S. futures were looking at gains in the range of 0.60% to 0.70% in early premarket trading as optimism for 2019 grows. In addition to the trade-related news, today’s market is supported by the latest read on inflation. The U.S. PCE Price Index, including data for the last two months, shows that inflationary pressures are contained.

The index rose 1.8% in December and 1.7% in January showing a sustained increase in inflation but at a slowing rate and below the FOMCs 2.0% target. At the core level inflation held steady at 1.9% both months. The news was well received by the market because it suggests the FOMC will remain neutral on policy changes for the foreseeable future. If the market closes higher today the indices may make another move higher over the next week.

This article was originally posted on FX Empire

More From FXEMPIRE: