Equity markets higher on commodity prices, UK CPI beats expectations, ASX SPI200 futures up 42 points

European equity markets were broadly higher on Tuesday, following the release of German CPI which remained unchanged at 0.3% for March (YoY), while U.K. CPI increased 0.5% vs 0.4% (Mar YoY) and core CPI 1.5% vs 1.3% (Mar YoY). The DAX30 index finished 0.81% higher while the FTSE100 index closed up 0.68%, with the British Pound trading 0.45% stronger against the Euro.

There was no significant U.S. data out overnight however equities followed the European lead with the benchmark S&P500 index up 0.97% and Nasdaq100 index 0.84% higher. Commodity prices were broadly higher while the U.S. dollar index remained relatively unchanged, suggesting demand for commodities continues to improve. News of unconfirmed reports that Saudi Arabia and Russia have reached a consensus on an output freeze ahead of the April 17th Doha meeting, saw both Brent and WTI crude oil prices rally, up 2.36% and 4.48% respectively. Copper futures rose 2.7%, the best day in the past month following the recent selloff and iron ore prices also climbed 4.59%. The chart below highlights the Thomson Reuters equal weight commodity index continuing higher, showing early indications of an improving outlook following the January 2016 low.

Looking to the Australian market, we can expect a stronger open this morning with ASX SPI200 futures trading 42 points higher, and I expect to see the resources sector leading prices higher today given moves in commodity prices overnight.

Data Releases:

·         Westpac Consumer Confidence (Apr) 10:30am AEST

·         Euro-Zone industrial product (Feb YoY) 7:00pm AEST

·         US Advance Retail Sales (Mar) 10:30pm AEST

·         Bank of Canada Rate Decision (Apr) 12:00am AEST

·         US Department of Energy Crude Oil Inventories (Apr) 12:30am AEST

·         US Federal Reserve Beige Book 4:00am AEST

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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