US equities rebounded on Monday driven by technology stocks.
United States
The S&P500 rose 0.63% overnight driven by communications 2.95% as Alphabet rose 4.60% after Bloomberg reported Apple was in talks to build Google’s Gemini AI engine into the iPhone, with shares in Apple also 0.64% higher. The Nasdaq Composite was also 0.82% higher along with the Dow Jones 0.20% while the Russell 2000 declined -0.38%.
There is was little economic data to guide investors other than the NAHB housing market index, which rose to 51 compared to forecasts of remaining unchanged at 48 in March. Elsewhere, Goldman Sach’s economists have amended their forecasts for the number of rate cuts this year lowering this from 4 to 3 citing a slightly higher path of inflation. This follows inflation data last week which was slightly above estimates. Meanwhile, traders see 3 rate cuts this year based on Fed Fund futures. Tonight, Canadian inflation data for February along with US building permits for February will be in focus.
Europe
European equities began the week on a softer note, with the Euro Stoxx 600 -0.17% lower along with the DAX -0.02%, CAC -0.20% and FTSE100 -0.06%. Central banks will be in focus this week, with the Bank of Japan expected to lift interest rates this morning to 0% from -0.1% while the RBA is expected to leave rates on hold at 4.35%. The Fed is also expected to leave interest rates unchanged when it meets on Wednesday, as well as the Bank of England on Thursday. In focus this evening in economic data is the latest round of economic sentiment indices for the Eurozone and Germany, expected to show a modest improvement.
Australia
The ASX is set to open flat this morning, with ASX200 futures down just 1 point or -0.01% to 7,683. The index edged up 0.07% on Monday after initially starting the session lower with financials 0.56% and materials 0.25% offsetting weakness elsewhere, with real estate -1.887% the worst performing sector. The Australian Dollar is modestly weaker by -0.05% to 0.6557 ahead of the RBA rate decision announced at 2:30pm AEDT. The central bank is expected to hold interest rates at 4.35% with Governor Michele Bullokc’s press conference at 3:30pm. Given recent data including inflation and employment has been softer than the RBA’s forecast, rate cuts in the latter half of the year remain likely, although no urgency at this stage to ease policy.
Commodities
Oil prices rose overnight with both WTI and Brent crude up 2.34% and 1.96% respectively. Iron ore futures in Singapore jumped 3.97% on Monday, although are -0.65% weaker this morning at US$103.20 with copper 0.15% higher. Gains follow better-than-expected Chinese data on Monday, with fixed asset investment for the 12 months to February rising 4.2% compared to 3.2% forecast. Industrial production and retail sales were also higher than expected at 7% vs 5% and 5.5% vs 5.2% respectively. Gold edged up 0.18% overnight to US$2,159 an oz, silver weakened -0.6% along with Bitcoin which is trading -1.71% lower.
Chinese Datta (YoY %)
Economic Calendar
19th March 2024
BOJ Rate Decision 14:00
RBA Rate Decision 14:30
Eurozone Economic Sentiment (MoM Mar) 21:00
Canadian Inflation (YoY Feb) 23:30
US Building Permits (MoM Feb) 23:30
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.
