The S&P500 made new record high, as Oil rallied for third session and Chinese stocks breaking higher after multi month consolidation. China A50 index futures increased 5% since Friday on rumours of PBOC’s stimulus and also playing catch up with global indices. The breakout is significant as price hovers above 10,000 psychological level on strong volume, first time since January after months of consolidation between 9800 and 9000. Chinese stocks have taken a back seat after significant fall in second half of 2015, with speculators shifting interest to other markets. The recent rally could reignite the volatility we seen in late 2014 & 2015.
Oil market continued to be supported with output freeze deal on the wire. There’s always plenty of speculation prior to deal meeting among OPEC & non-OPEC producers. The recent rally reflect market positioning as shorts cover. Prior meetings suggest there’s nothing to be excited about. It’s immensely difficult to Oil producers to reach output freeze deal as interests conflict.
The Australian Dollar retraced some of its losses after Friday’s US retail sales data. Risk on sentiment and commodities price supporting the higher yielding currency. Today we have the RBA’s meeting minutes. It’s unlikely to contain much extra insights, however commentary on the AUD and property market are of an interest. The AUD is likely to remain in consolidation mode.
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