Financial Market Review for March 27, 2018 Macroeconomic data is expected to continue to take a back seat this week as the markets look to China and the U.S to avoid a trade war that may well end in disaster for both sides and the global economy. The USD has taken the brunt of the negativity, with the equity markets moving ahead on hopes of a resolution to trade disputes. Economic data through the Asian session this morning, was on the lighter side, limited to February new home sales figures out of Australia. New home sales fell by 0.7% in February, following the 2.1% fall in January, to make it the 2nd consecutive monthly decline. According to the HIA, the declines have been attributed to tighter lending policies, particularly on investment properties, and a pullback in overseas buyers. The Aussie Dollar moved from $0.77547 to $0.77528 upon release of the figures, before falling further back at the time of writing, up 0.18% to $0.7734, while the Kiwi Dollar slipped 0.11% to $0.729, with U.S Dollar finding some support through the early part of the day pinning back the majors and some profit taking weighing on the Kiwi Dollar, following Monday’s 0.9% rally. The stats had limited impact however, as the markets played catch up though the Asian session, with the Japanese Yen the biggest loser through the session, falling 0.23% to ¥105.65 against the U.S Dollar at the time of writing, as market fears of a trade war eased through the U.S session. News hit of the U.S administration already in talks with China was the market positive, the Chinese government having reached out in the interest of averting a trade war. In the equity markets, the ASX200 closed out the day up 0.72%, with the Nikkei up 2.27% ahead of the close, while the CSI300 and Hang Seng were up 0.88% and 0.86% . U.S. stock futures pointed to more gains for markets Tuesday, as concerns about a global trade war continued to dissipate. Dow Jones Industrial Average futuresYMM8, +0.56% rose 122 points, or 0.5%, to 24,313, while S&P 500 futuresESM8, +0.49% gained 11.75 points, or 0.4%, to 2,670.75. Nasdaq-100 futuresNQM8, +0.82% added 37.75 points, or 0.6%, to 6,810.50. All three major benchmarks logged their best one-day gains since August 2015 on Monday, with the DowDJIA, +2.84% climbing 669.40 points. Those gains were on the heels of the biggest weekly decline in more than two years. Stocks also saw sizeable gains across Asia, led by a 2.3% gain for the Nikkei 225 index NIK, +2.65% Across other assets, gold pricesGCK8, -0.01% slipped modestly, while oil CLK8, +0.26% prices rose and the ICE Dollar Index DXY, -0.46% was flat. For the EUR, economic data scheduled for release this morning includes prelim March inflation figures out of Spain, jobseeker numbers out of France, with Eurozone private sector loan numbers and business and consumer confidence figures also scheduled for release. While focus will be on the inflation numbers, we will expect the less material stats to also provide direction through the morning, with business and consumer confidence key to driving the economy, though the surveys may have been completed before the EU’s exemption on steel and aluminium tariffs, which could give misleading signals. Whether the stats will have the final say remains to be the seen, with the market’s negative sentiment towards the U.S government and the threat of a trade war having seen the EUR rally to $1.24 levels.
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