Analysts at ANZ noted the key developments from the overnight session, European and US.

Key Quotes:

“Overnight global markets moved on from the missile strike in Syria at the weekend. US bond yields edged higher, while the stock market gained on positive US data, central bank speakers, and confirmation that Trump intends to nominate Richard Clarida for Fed Vice Chair.”

“The USD was down against most pairs, weighed by a Trump tweet saying that Russia and China are playing the “currency devaluation game”.”

“At the time of writing, the S&P 500 was up 1%. Fixed income yields were generally higher, although the yield on the US 10-year note was unchanged at 2.83%.”

“In Europe, equity markets were down overnight (FTSE 100 -0.9%; DAX -0.4%). Oil prices fell, with WTI down 1.6%. Gold was little changed.”

“As expected, US President Trump confirmed overnight that he intends to nominate Richard Clarida to Federal Reserve Vice Chair. Trump also intends to nominate regulator Michelle Bowman as Fed Governor. These nominations are subject to confirmation by the US senate.”

“US Fed officials Kaplan and Dudley were positive overnight on the outlook for growth and interest rates. Kaplan expects three rate hikes this year (in line with market expectations) and thinks 2.5-2.75% is close to neutral. Dudley sees three or four rate hikes this year and said that 3% is a reasonable starting point for neutral. In Europe, ECB’s Praet said he is “confident” in the inflation outlook, but ample stimulus remains necessary.”

“March retail sales rose 0.6% m/m vs expectations of a 0.4% m/m gain (last: +0.1%). March was the first month that consumers will have started to feel the benefits of the recent tax cuts, so possibly that may have helped underpin spending. Business inventories rose 0.6% m/m in February, the third monthly gain of around this size. It appears there is some inventory rebuild going on. But how long this will continue if trade anxiety were to intensify is an open question. Other data showed buoyant optimism in the construction industry and a solid performance by manufacturers in New York.”

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