US equities climbed on Thursday despite a rise in longer-dated bond yields as Fed officials pointed to a more patient approach by the Federal Reserve.
United States
Overnight, John Williams of the New York Fed noted “There’s no clear need to adjust monetary policy in the very near term”. Adding to this, Susan Collins of the Boston Fed stated “recent data have not materially changed my outlook, but they do highlight uncertainties relating to timing, and the need for patience”. Offsetting these comments somewhat, and a hotter-than-expected inflation print on Wednesday, producer prices rose 0.2% in March, below the 0.3% forecast and easing from 0.6% in February.
The S&P500 rose 0.74% along with the Nasdaq Composite 1.68% and Russell 2000 0.7% with the VIX easing -5.63% to 14.91. While the 2-year yield was -1.2 basis points lower the 10-year rose 4.3 basis points to 4.587% while the 30-year was 5.6 basis points higher.
Europe
The Euro Stoxx 600 declined -0.4% overnight along with the DAX -0.79%, CAC -0.27% and FTSE100 -0.47%. The weakness follows a fall on Wall Street the prior session, despite the ECB signalling its on track for cutting rates in June. ECB President Christine Lagarde noted “a few” governing council members were sufficiently confident on inflation to lower rates, but in June more data including new forecasts would be available.
Australia
Despite the positive lead from the US, the ASX is expected to open weaker this morning with ASX200 futures down -0.37% to 7,820. The index declined 0.44% on Thursday with mixed sector performance as materials rose 0.55% while financials fell -0.91%. Energy was a bright spot, rising 1.2% following gains in the price of oil over rising geopolitical tensions with Woodside Energy up 2.1%. NextDC, the data centre operator was in a trading halt after announcing a $1.3 billion raise at a 6.8% discount to the last traded price.
Commodities
Oil was softer overnight, with WTI down -1.38% to US$85.02 a barrel. Iron ore futures in Singapore rose 1.42% on Thursday to US$108.22 although are -0.25% softer this morning, with copper -0.68% lower. Gold rose 1.65% to US$2,372 an oz, silver gained 1.77% and Bitcoin 1.01%.
Economic Calendar
UK GDP (YoY Feb) 16:00
US Consumer Sentiment (MoM Apr) 00:00
Fed Bostic Speech 4:30
Fed Daly Speech 05:30
This article was written by James Woods, Portfolio Manager, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
