Fluid situations

Prepared by Jeff Halley, Senior Market Analyst

Fluid situations

Global markets took an upbeat tone overnight, preferring to concentrate on known knowns rather than known unknowns or unknown unknowns. Following Washington’s decision to place Huawei on a blacklist that could ban them from sourcing vital US technology if enacted, the street appears to have temporarily given up trying to predict the fluid situation that is US-China trade relations and concentrate on the here and now.

The here and now on Wall Street was strong US housing starts and sparkling results from heavyweights Walmart, Nvidia and Cisco Systems, suggesting yet again that despite the international noise, the US economy is still moving full steam ahead. Following rises yesterday in Europe and China, the S&P finished 0.90% higher, the Nasdaq climbed 1%, and the Dow Jones rose 0.80%.

European Union inflation and the US Michigan Consumer Sentiment are the heavyweight data points due this evening to finish the week. They could tell a tale of two halves, with the US consumer alive and well while EU inflation continues bumping along the floor. Here in Asia, the New Zealand dollar (NZD) continued its weekly fall following uninspiring PPI data this morning.

We have important data from two trading bellwethers in Asia today. Singapore released its Balance of Trade at 0830 Singapore time (SGT), while Hong Kong releases its quarterly GDP Growth Rate at 1630 SGT. The street will be looking for a continued recovery in Singapore’s non-oil exports and a bounce back in Hong Kong’s quarterly GDP growth following a slump of 0.50% previously. Like Australia and New Zealand, Singapore and Hong Kong have a massive correlation to China growth and the data will be closely watched to gauge the state of play in Asian trade. Poor prints could see a negative overflow

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