FTSE +22 points at 7172
DAX +45 points at 11640
CAC +20 points at 4850
Euro Stoxx +16 points at 3297
The S&P500 hit a fresh all-time high of $2284.63 on the back of solid company earnings, the Dow Jones advanced to $19949. The US stock futures were bid in Asia, as the US 10-year yields climbed above 2.45%.
The risk-on investors remained in charge in Asia. The Nikkei (+1.43%) and Topix (+1.01%) were bought despite the strong yen. The USD/JPY rebounded lower from the 114.00 offers, as traders remained reluctant to unwind their long yen positions.
Gold weakened to $1202.78, as capital moved into the global equities.
The US dollar firmed against the majority of the G10 currencies, while the Mexican peso (0.20%) sold off the most against the greenback on renewed concerns regarding the US’ plans to build a wall between the US and Mexico. US President Donald Trump prepares to unveil his plans regarding the US’ refugee crisis and the Mexican wall on National Security later in the day. The wall may be a costly and inefficient way to stop the immigration, yet Donald Trump would still insist on the realization of the project as his unique signature in the US history.
On the other hand, the US stocks are being purchased although the lack of concrete and conventional policy plans from the new leader started worrying the investor community and the US’ protectionist trade stratagem has become a global concern. The volatility index VIX eased to the lowest levels since the US election, hinting at the risk of higher, and potentially negative volatility in the US stock markets.
Intesa (MI:ISP)-Generali (MI:GASI) merger plan hit the newswires in Italy. The deal aiming to bring together Italy’s biggest insurer with its second largest bank will likely encounter some resistance from investors, who may see little synergy in such deal from an industrial perspective.
The EUR/USD traded rangebound within 1.0722/1.0738 in Asia. The failure to clean resistance at the 100-day moving average (1.0760) dented the positive momentum. A solid German IFO read could give a hand to the euro bulls in Frankfurt. A slide below the 1.0700 handle could hinder the positive trend and trigger a short-term bearish move toward 1.0600/1.0580.
Cable hold ground above the 1.2500 level in Asia amid the UK’s Supreme Court refused to give PM Theresa May the power to trigger the Article 50. May could not trigger the Brexit without the Parliament approval. The relief rally saw resistance at 1.2575 (minor 23-6% retracement on post-Brexit decline), if surpassed, should encourage a further rise toward 1.2774 (December peak).
Although the pound appreciation could continue weighing on the FTSE stocks, the UK’s mining stocks are expected to push the index higher at the open on the back of positive company news. BHP Billiton (NYSE:BHP) announced strong second quarter results for its most profitable iron ore business. The company’s iron ore output rose 9% in 2Q.