Morning Minutes

New Year’s Rally Arrives Overseas




Shrugging off yesterday’s soft US market action which saw major indices trade between flat and down 0.8%, overseas markets have been soaring overnight. Amid anticipation of Chinese economic reopening and some US regulatory developments for some Chinese companies, the Hang Seng jumped 3.2% in overnight trading while Sydney gained 1.6%. In Europe this morning, better than expected Service PMI reports from several countries and improved inflation numbers from France and Switzerland has major indices in the green today, including gains of 1.5% for the Dax and CAC plus a rise of 1.3% in Italy and a gain of 0.4% for the FTSE.

With the 10-year US treasury note yield sliding back under 3.70% ahead of today’s 2:00 pm EST release of minutes from the December FOMC meeting, US index futures are up 0.2% to 0.5% this morning. US ISM PMI numbers are due at 10:00 am EST with headline Manufacturing PMI (street 48.5 vs previous 49.0), Prices Paid (street 42.5) and New Orders (street 48.1) potentially attracting attention from investors. Tomorrow morning brings ADP payrolls at 8:15 am EST (street 150K vs previous 127K).

The US Dollar is giving back much of yesterday’s gains igniting rallies in other currencies including gains of 0.8% for the Canadian Dollar and Gold, 0.5% for the Euro and Pound, and 1.9% for the Australian Dollar. Even cryptocurrencies are getting in on the act today with Bitcoin climbing 1.0% and Ethereum gaining 3.4%. Commodities, on the other hand, are having another tough day including drops of 3.1% for WTI Crude Oil and 1.3% for Copper.

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Colin Cieszynski, Chief Market Strategist

Colin Cieszynski, CFA, CMT
Chief Market Strategist
+1 (647) 282-4428

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