US markets finish quarter positive, GBP worst performing currency year to date, ASX SPI200 futures down 20 points

U.S. equity markets closed modestly lower overnight, with the S&P500 down 0.2%, while the Dow Jones Industrials and the Nasdaq 100 finished the trading session lower by 0.18% and 0.16% respectively. After a rocky start to the year, the S&P500 index closed up 1.02% for the 1st quarter, following an impressive five week rally from the February lows as investor confidence is returning. The U.S. dollar index (DXY) was down approximately 4% over the same period as the Federal Reserve lowered their interest rate hike guidance.  

European markets were lower overnight, with the DAX 30 index down 0.81% (down 7.23% for the quarter) while the FTSE100 closed 0.46% lower (up 0.15% for the quarter). The British pound continues to trade lower against the EUR on “Brexit” fears and while the recent declines look exhausted, overall I expect this to continue leading into the June 23rd vote and volatile period of European stock indexes. The first image below shows the performance of G10 currencies against the USD for the year to date, with the British pound the only negative currency down 2.61%.

Spot gold closed 0.91% higher overnight. The second chart below shows the precious metal up an impressive 16% from the start of January as investors piled into the safe haven asset on the back of further stimulus from the European Central Bank and Bank of Japan.

Looking to the local market, we can expect a weaker open this morning with ASX SPI200 futures trading 20 points lower while the Australian Dollar was 0.17% weaker overnight.

Data:

·         Chinese manufacturing & non-manufacturing PMI 12pm AEST

·         Euro-zone unemployment rate 8pm AEST

·         US unemployment & non-farm payrolls 1130pm AEST

·         USD ISM manufacturing 1am AEST 02/04/16


Source: Rivkin, Bloomberg, Updata

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This article was written by James Woods - Global Investment Analyst, Rivkin Securities Pty Ltd. Enquiries can be made via info@rivkin.com.au or by phoning +612 8302 3600.

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