Daily Outlook – Friday 31st March
Written by Paul Clifford Attachments: Reuters ASIA FX, ANZ NZ Morning Focus
WTI Crude Oil traded through, and held, the $50 level. Currently trading 50.51. US inventory tightening and supply disruptions in Libya have boosted the commodity. OPEC supply cut discussions should be monitored for clues on further direction.
2016 Q4 GDP in the US grew 2.1% and jobless claims ticked down to 258,000. This was enough to see the DOW (+0.33%) and S&P (+0.29%) rally to last weeks levels. The Nasdaq closed at record levels of 5,914.34, eying 6,000 – coincidentally the same level Australia’s ASX200 is lining up after putting on over 200 points this week.
The Fed’s Dudley this morning said there were risks to US growth, and inflation may be shifting to the upside – however 2% inflation is not a ceiling. Earlier the Feds Kaplan stated “Three hikes in 2017 is a good base case outlook for the Fed”
In Europe, another strong session for the DAX and CAC both closing up over 0.40%. The EUR/USD has come under continued selling pressure, currently trading mid-march levels of 1.0679. This pressure has coincided with the EUR/GBP dropping through the 200-day moving average and some signs of strength on the GBP/USD (1.246) as Brexit talks, for now, don’t offer any downside risks.
Some huge moves in the USD/ZAR. South African President Zuma announced on Monday he was cancelling the Treasury’s investor roadshow to the UK and US, and ordered Finance Minister Gordhan to return home. In Reuters news this morning Zuma removed Gordhan as finance minister in a cabinet reshuffle. This week’s rally has been 12.30 – 13.41, a 9% appreciation.
At an Arctic Forum in Russia, Vladimir Putin said he is ready to meet with President Donald Trump prior to July’s G20 meeting. “We have a lot of things to discuss in economy, security and regional conflicts”. Not a market mover but expect to see further headlines.
Traders should be aware of week end, month end, quarter end today. Expect to see market moves that don’t correlate and some tricky conditions.
