Wall Street searched for inspiration overnight but found very little in the pot, with lower Chinese growth balancing out better US ISM services sector data and a seven-month high in new home sales. Stocks limped into the close with the S&P finishing 0.1% down, the Dow Jones dropped 0.05% and the Nasdaq fell 0.2%. Individual stocks saw intra-day volatility with General Electric (NYSE:GE) falling nearly 5%, but the net effect was that gainers and losers cancelled each other out.
The currency markets showed a smidge more life with the dollar rising overnight. The dollar index rose 0.16% to two-week highs as a directionless macroeconomic picture saw light haven flows head back into the greenback. The British Pound (GBP) continued its slow slide from above 1.3300 last week ahead of next week’s Parliamentary Brexit vote.
The data calendar starts gathering steam today with the regional highlight being Australian GDP, which was released at 0830 Singapore time. At 2.30%, the lower-than-expected print has provided at least some short-term volatility in the Aussie (AUD). Tonight’s Bank of Canada rate decision will be closely watched to see if yet another previously hawkish central bank U-turns and lets doves fly.
FX
The greenback made moderate gains against G-10 and regional currencies overnight as traders moved to the sidelines awaiting more macroeconomic clarity. We expect the same tepid theme to continue into Asia today with a quiet day ahead. Things should get more exciting as we head into a data-heavy last two days of the week.
Equities
Asia will be closely watching for headlines on either US-China trade or from the People’s Congress in Beijing for direction. If neither provides the soundbites required, Asian equities are likely to follow Wall Street and endure a lukewarm trading day.
Oil
Despite some intra-day volatility, Brent crude and WTI finished the session unchanged from the previous day. Exxon (NYSE:XOM) and Chevron (NYSE:CVX) announced plans to massively expand shale output, but this was balanced by the ongoing efforts of OPEC+ and hopes of a US-China trade deal.
Gold
Gold edged slightly higher, rising USD1 to 1,287.85 an ounce, having tested 1,280.00 earlier in the session. The yellow metal benefited from safe-haven flows as moribund trading in other markets saw traders head to the sidelines. From a technical perspective, 1,280.00 and then 1,275.00 remain the crucial technical support in the near term.