The dollar pushes back
A rowdy morning it was. After Asian stocks resumed Wednesday’s selloff Europe shows signs of resilience. Bonds rose, the dollar counterattacked and the yen pared some of yesterday’s gains.
Stoxx Europe 600 held firm, being little changed even as most Asian indices fell back. The dollar made gains for a third day out of four.
The 10-year yield dropped after China said the report about US debt could be “fake news”. WTI remained unchanged at $63 a barrel.
On another note, the Canadian dollar and peso fell, scarred by the rising odds the Trump administration might pull the US out of NAFTA.
Keep an eye on those events by the end of the week: US inflation is published today and it’ll likely show no signs of faster price growth, discouraging more aggressive Fed tightening.
JPMorgan Chase & Co. and Wells Fargo post earning on Friday.
Optimism kicks back in
You can’t keep the bull down! US stocks resumed the rally after the first falling back of the year on Wednesday. They even reached fresh records.
The dollar fell while Treasuries stopped their decline. The S&P 500 is already 3.5% up in 2018. Among them small caps and techs reached records.
Dow Jones also hit a record. The 10-year Treasury yield fell back to 2.53% Bonds stopped a slide, initiated by a cooling of the inflation concerns and a potential for fewer Treasury purchases by China.
Oil barely budged after wiping out a gain that took it to a 3-year peak. Natural gas futures in the US however spiked higher.
Big news tomorrow – we wait for JPMorgan and Wells Fargo’s results. Investors will be looking for any comments that might point to a 2018 result boost from Trump’s tax cuts.