So… tomorrow is good Friday and yes, we can sleep in… global markets look like they are getting a little bit “tired” and we need to ask ourselves whether the Easter bunny will bring us some chocolates to wake us up… the key question for markets now is “what are the catalyst” to drive us higher….?
Yes, it isn’t Friday, but guess what?
Tomorrow, we can sleep in… as it is Good Friday…
And on Monday, we can sleep in as well...
So make sure to eat lots of chocolates and re-charge your batteries, as this will be our last break for a while…
So what happened last night?
US Stocks fell (Dow down 79 points), as the USD rallied and commodities retreated.
The AUD/USD fell by over 1% and this should weigh on our markets today, given the strong correlation between our dollar and equity markets….
It does appear that the recent run is losing “steam”… and as we head into May… investors are cautious.
Volumes have also been extremely light, so we are watching with interest…
So what are the next major catalysts that will drive our markets higher?
1. RBA cutting interest rates…
2. Additional stimulus announced by the PBOC..
3. US macro-data to remain strong
4. AUS Corporate earnings and earnings upgrades
The key is for the RBA to cut interest rates in the first week of April… this will boost consumer and business sentiment, on the provision that the banks will pass the rate cut on…
What's on today?
Local data: Australian jobs data detailed Feb Q, NZ Feb trade balance
Overseas data: Japan March manufacturing PMI; EU Markit manufacturing March PMI, Markit services March PMI, German GfK April consumer confidence; UK retail sales Feb; US durable goods Feb, US Markit manufacturing March PMI, Kansas Fed manufacturing March.
Fed speakers: James Bullard
The SPI is down 33 points this morning.
Niv Dagan is an Executive Director of Melbourne based boutique funds management and corporate advisory firm, Peak Asset Management (www.peakassetmanagement.com.au). He is also a regular financial commentator on Sky Business.