Sentiment was positive during the asian session, with the major inidces claiming gains for the day. Asia took a positive handover from the US, were some solid quaterly reports helped fuel strong support for the major US indices. The Dow gained more than 200 points and Nasdaq managed to claim above the 6000 level for the first time.
Optimism was also helped by the averted worst-case scenario last Sunday when we had the results of the first round of the French Presidency. In the meantime talk of Trump’s upcoming tax plans, were it is expected that he will cut corporate tax significantly, also aided optimism.
USD weakness continues and after hitting lows last seen in November ’16 yesterday when it hit lows of 98.70, it looks as though the selling pressure remains. Even the Yen was weaker as demand for those currencies perceived to be safer eased on the back of an improved overall risk sentiment as proved by equity performance.
Overnight we had data out of Australia showing that inflation slowly made it above 2% as the cost of energy, health and education left their mark. Australia is still short of its 2 to 3% inflation target band however on the core measures of CPI, as it tries to avoid deflation.
The Aussie has been weaker against the USD as it enters its third consecutive day of losses.
