This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Correspondingly, Asian markets are expected to remain on a broad upward trajectory for the second trading day of the week.
US markets broadly rose at the start of the fresh week, as the optimism seeped through with seemingly little items that could serve as short-term dampeners. Leading gains in the S&P 500 index’s trek to a fresh all-time high had been the IT, healthcare and financial sectors. From a technical perspective, one may find the 50-day moving average for the S&P 500’s tech sector serving as a good support as the market bought ahead of the level. Fundamentally, judgement day for technology shares may be closing in with less than a month to go before the arrival of earnings reports from large tech names. Prices could certainly hold onto recent gains with price-to-earnings ratio expected to moderate in Q2.
Gains had not been contained to just equity markets at the start of the week as the US dollar gained on comments from Federal Reserve Bank of New York President William Dudley. Spending a good part of his discussion reinforcing Fed chair Yellen’s view that the labour market conditions remain positive, the influential Fed official has certainly helped to reinforce the Fed’s hawkish stance. The dollar index was seen picking up approximately 400 pips to trade on either sides of 97.600 into Tuesday morning. The third key member, Federal Reserve Vice Chair Stanley Fischer will adds his views today, one to keep watch of.
Asian markets are expected to continue finding moderate gains for a second day of the week with the US leads. The weight from the crude oil slide, is expected to bring prices down for energy shares and dampen some of the gains for regional markets. The attention drawn to the revival of oil output from Libya saw WTI futures fall towards the $44.00 per barrel psychological support overnight, with some retracement seen when last checked this morning.
A fairly busy day lies ahead as the market is expected to zoom in on Australia’s Q1 house price index and the RBA meeting minutes this morning ahead of some tier-2 data in Asia. The key attention, however, may stick to the MSCI A-shares inclusion decision after 4.30am tomorrow (Singapore time).
The US hours would find eyes on Q1 current account balance. Notably, Federal Reserve Vice Chairman Stanley Fischer will speak this afternoon at 3.15pm Singapore time while Fed’s Rosengren and Fed’s Kaplan will be due after market closes.
Yesterday: S&P 500 +0.83%; DJIA +0.68%; DAX +1.07%; FTSE +0.81%