Daily summary: Another rebound on the markets
- Positive data from the US economy
- BOC cut rates by 50bp
- Super Tuesday’s results helped US Indices recover from yesterday losses
Optimism returned to the markets thanks to the outcome of presidential Democratic primary election in the US. The markets have welcomed the fact that Joe Biden will probably be the next candidate for the President of the United States. He is considered to be more business friendly than his main opponent Bernie Sanders. The macro-economic data from US that were published today in the afternoon also positively surprised investors. Both ADP employment change and ISM non-manufacturing PMI came above expectations. The Australia GDP report for the last quarter of 2019 showed 0.5% growth. This proved helpful to the Australian dollar, which has strengthened and is one of the best performing G10 currencies.
The Central Bank of Canada cut its interest rates by 50bp to 1.25% which was expected by majority of market participants. As result, the Canadian dollar weakened against other major currencies. BOC's decision had a positive impact on S&P/TSX which gained 1.3%.
Most of the global equity markets traded higher today. The Dax rose 1,01%, FTSE 100 gained 1.19 %, CAC 40 went up 1.36% and Nikkei rise modest 0.08%. The US Indices went up 1.7% on average. Prices of gold and silver slightly declined after yesterday highest single-day gain since June 2016 as investors assessed whether recent rate cuts will be sufficient to negate the negative impact of the coronavirus on the economy.
US Crude Oil inventories rose by 0.785 million barrels in the last week of February 2020 compared to marker consensus of a 2.644 million gain. The data however did not cause any major movement on the market, which apparently awaits tomorrow's OPEC meeting. From other macroeconomic publications scheduled for tomorrow, it is worth paying attention to the speeches of the presidents of BOC and BOE, which can outline further potential actions they intend to take in an attempt to combat the economic fallout from the coronavirus outbreak.
USD/CAD is trading higher today as it managed to break above the 1.3396 resistance level. Amid this rapid upward move, the currency pair now seems to approach the recent hights at 1.3463 level. Source: xStation5
