0825hrs UK SW Riksbank First Deputy Governor Kerstin af Jochnik speaks in Stockholm
0930hrs UK UK Unemployment Statistics (est 127K 3m-3m / 4.22% vs previous 55K / 4.2%)
1000hrs UK EU Industrial Production (est 0.63%mom / 3.56%yoy vs previous -0.8% / 2.9%)
1000hrs UK EU GDP (est 0.4% qoq / 2.5% yoy vs previous 0.4% / 2.5%)
1000hrs UK EU Zew Survey of Expected Economic Growth (previous 1.9%)
1300hrs UK US Dallas Fed President Robert Kaplan speaks in New York
1330hrs UK US Empire Manufacturing Survey (est 15.34 vs previous 15.8)
1330hrs UK US Retail Sales (est 0.31% vs previous 0.6%)
1500hrs UK US Business Inventories (est 0.16% vs previous 0.6%)
1500hrs UK US NAHB Home Builder Index (est 69.26 vs previous 69)
1800hrs UK US San Francisco Fed President John Williams speaks in Minneapolis
Earnings releases from US include Home Depot, Axa Equitable & ARMO Bioscience
In the UK, Vodafone Q4 earnings are due
STOCKS: Wall Street stocks closed a choppy session slightly higher yesterday as weakness in defensive stocks offset optimism following President Trump’s conciliatory remarks towards China’s ZTE that calmed the troubled waters of US – China trade. The S&P500 pared its gains, hitting two month highs around the European close before slipping back to close barely positive at 2730.13, but nonetheless continuing a four day winning streak. The Dow followed broadly the same pattern, closing 68.24 higher at 24899.41 and the Nasdaq100 tracking in between the others to post a gain of 11.81 at 6964.373. Gaming stocks jumped as the Supreme Court paved the way for states to legalise sports betting, with race track operator Penn National, Caesars Entertainment and Madison Square Garden all posting solid gains.
Asian stocks have weakened to various degrees today, with the mainland Shanghai Composite bucking the trend with a positive move so far. The Hang Seng is the big underperformer, down over 1.0% currently, with IT and Real Estate sectors giving back all their gains from yesterday. Australia's ASX 200 closed down on the low with Telcos weighing on the market. The index is struggling to overcome the Jan highs with 6,150 acting as stiff resistance.
US TSYS: US Treasuries have traded in lackluster fashion in the Asia morning, with the 10-year operating within a 5 tick range amid no major news announcements. There has been an ever so slight flattening of the curve as 30-years outperform. Empire manufacturing and retail sales are the major potential market movers today, but eurozone GDP data could also have an impact as we saw yesterday following the large backup in German yields. Tsy ylds: 2Y 2.5475%, 3Y 2.7069%, 5Y 2.8587%, 7Y 2.9649%, 10Y 2.9969%, 30Y 3.1282%
OIL: The major crude benchmarks edged a tad lower over night with Brent edging back from multi-year highs, reflecting consolidation following yesterday's large gains on the back of an OPEC report showing global supply glut almost eliminated. Brent trades at $78.20 and WTI at $70.91 with the spread hitting a new 3-year wide. Both benchmarks remain on firm uptrends with significant resistance a long way off.
GOLD: Gold has consolidated at 1,314 following yesterday's losses that were driven by the rise in global bond yields, particularly in Europe, which undermined the metal's appeal. With geopolitical tensions also cooling the metal has fallen back to the lower end of its range, which lies between the 200DMA on the downside and the 50 and 100DMAs on the upside. The gold VIX fell to a 2-month low yesterday.
FOREX: Currency markets have been pretty uneventful with no major market drivers in the Asian session. The majors are all trading within 0.1-0.2% of yesterday's close. Yesterday`s dollar strength came in spite of the narrowing in real yield spreads between the US and Germany as German bond yields shifter higher. The yen faces risks from a continued rise in German and/or US yields, with resistance at 110.00 in USDJPY likely to prove pivotal.