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ASIAN OPENING REPORT: WEDNESDAY – 16TH – MAY – 2018 May 15, 2018 at 10:30PM

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ASIAN OPENING REPORT: WEDNESDAY – 16TH – MAY – 2018

 

ASIAN OPENING REPORT

WEDNESDAY – 16TH – MAY – 2018

US cash equity markets were broadly higher yesterday (DJIA -0.78%, S&P -0.68%, NASDAQ -0.881%). Healthcare stocks lagged the broader market while energy stocks were closer to unchanged as oil prices inched higher
again – US crude futures settled at $71.31 (+$0.20). In Europe, bourses closed with minor gains (FTSE +0.3%, DAX 0.0%, CAC +0.2%, FTSE MIB +0.4%). The Italian FTSE MIB was one of the best performers as investors anticipated an eventual agreement between the
League and Five State on forming a government. Latest reports suggest a deal could be announced tomorrow. Telecommunications lagged the broader markets after the French outfit missed on Q1 earning expectations.

Investors were also keeping an eye on the bond markets as US borrowing costs continued to rise – the ten year yield added seven basis points to around 3.07%. This kept the Dollar on the front foot meanwhile despite
a mixed US retail sales report. Comments from San Francisco Fed President Williams were largely ignored as he said three-to-four rate increases this year would be appropriate. We heard from Dallas Fed President Kaplan who said he is carefully watching the
shape of the curve and does not want to in the future knowingly create an inverted yield curve.

BoJ Governor Kuroda meanwhile said there are no plans to move the 10-year yield target for the time being. He did add however that they will not defend the 10-year yield target of around zero percent at all costs.
Also of note, North Korea said they are cancelling high-level talks with South Korea due to the joint US-South Korea military exercises. It was also suggested they could cancel the US summit although the State Department said they have had no such indications.

Looking ahead, we await a busy data slate that include Japanese GDP, Aussie consumer sentiment and wage data plus a BoT policy meeting.

 

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