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Malcolm… Are you happy now?

Good Morning,

Happy Friday!

It’s been a great week for global markets, driven by better than expected earnings and a pick-up in commodities…

The XJO is now above 5,300…. A level that it hasn’t witnessed for nearly six months.

Iron ore closed up 8% last night to over $70/tonne… wow….

Remember that it was only a few months ago, when iron ore was trading near $38/tonne…

To put things in perspective, a $10/tonne movement in iron ore, translates to ~ 0.5% in GDP for AUS……….

Malcolm, are you happy about that???

Our great run came to an end last night, as US stocks closed lower (Dow -113 points), breaking a three-day winning streak, as big declines in defensive sectors such as consumer staples, telecoms and utilities weighed on the main indexes.

Investors digested a number of mixed earnings reports while crude-oil prices retreated after two days of strong gains.

On the U.S. economic front, weekly jobless claims fell to the lowest level since 1973, pointing to continued strength of the labor market. An index of factory conditions sank back into contraction in April, suggesting the manufacturing sector may still be struggling to shake off economic headwinds.

Meanwhile, the Conference Board’s leading economic index rose 0.2% to 123.4. That follows a 0.1% decline in February.

Market reaction to European Central Bank President Mario Draghi’s news conference after the ECB left key interest rates unchanged was mostly muted.

ECB president Mario Draghi said interest rates will remain at present or lower levels for an extended period of time and called on critics to give the bank's stimulus program time to work. "Any time the credibility of a central bank is perceived as being put into question, the result is a delay in the achievement of its objectives - and therefore the need for more expansion," the ECB president told reporters in Frankfurt, raising his voice. "Our policies work, they are effective. Just give them time."

Japan in Focus

Interesting analysis………..

Japanese bonds have rallied sharply since Japan moved to “negative” interest rates, but that hasn’t seemed to help the nation’s stock market…

Signs of diminishing returns??

What's on today?

Earth Day 2016 and the landmark Paris Agreement is scheduled to be signed by the US, China, and 120 other countries. UN Secretary-General Ban Ki-moon will host the signing ceremony for the global climate change treaty at United Nations headquarters in New York.

Overseas data: China MNI April business indicator; Euro-area PMIs April; ECB publishes Survey of Professional Forecasters; Markit US manufacturing PMI (April preliminary).

Overseas earnings: Honeywell International, General Electric, Kimberly-Clark, McDonald's, Caterpillar, LyondellBasell Industries, American Airlines.

The SPI is down 27 points this morning.

Comments

Perth
Iron ore price rise = happy Western Australia

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