Stock markets were mostly higher yesterday, led there by the US market which saw the S&P 500 Index and the NASDAQ 100 Index rise firmly to reach new all-time highs.
- US stock markets remain very strong, with both the S&P 500 Index and the NASDAQ 100 Index pushing up to new record highs. I am very happy to be long of the US S&P 500 Index and the NASDAQ 100 Index, as shallow pullbacks continue to attract strong dip‑buying. The Japanese Nikkei 225 Index and the South Korean KOSPI Composite are also trading very close to a bullish breakout to new highs, keeping global equity sentiment firmly positive. Trend traders will be happy to be long of the two mentioned US indices - I am.
- Wheat futures have surged higher, breaking to a near new 2-year high price in Chicago with a strong bullish trend. If Wheat futures are too large or complex for you to trade directly, the US ETF WEAT offers more affordable exposure to Wheat prices. Trend traders will want to be looking to get long here while the breakout structure remains intact.
- ECB member Kazaks stated that if the crude oil price shock from Iran destabilises inflation expectations, the Bank will need to hike again. This may firm up the Euro slightly, but is really just a part of the more hawkish positioning that most central banks are undergoing now.
- Bank of Japan member Masu called for an early rate hike on the concern that Japan's monetary policy transition away from ultra-loose is proceeding too slowly. This may firm up the Japanese Yen slightly but is really just a part of the more hawkish positioning that most central banks are undergoing now.
- Kevin Warsh has been confirmed as the new Chair of the US Federal Reserve, as was widely expected, after the most contested vote for the role in US history. Warsh secured only a nine-vote majority in the US Senate, with many Congress members opposing his nomination as he is seen as insufficiently independent from President Trump, although it may be a symptom of growing partisanship extending to even these appointments. Exiting Fed Chair Jerome Powell is staying on as a voting member, which is highly unusual and also speaks to this division. The Fed's independence may be more closely scrutinised and its decisions on policy may become seen to be more political and less financial.
- President Trump's summit in China is ongoing, with his major purpose being getting China to agree to allow more US imports and joint ventures. Trump is accompanied by several American CEOs looking to do business in China.
- Today's Asian Forex session was extremely quiet, with no directional movement of any size anywhere. I expect that the AUD/USD currency pair will be a major focus in today's Forex market as the price action is bullish and it is close to making another new 3.5-year high price.
- There will be a potentially high-impact data release in the USA data of Retail Sales numbers.