FTSE +22 points at 7186
DAX +65 points at 11870
CAC +13 points at 4890
Euro Stoxx +12 points at 3338
The Dow Jones’ rally from $19K to $20K has been pointed as the second fastest rally in its history. The US banking stocks (+0.98%) were among the frontrunners. Industrial (+1.60%) and technology stocks (+1.17%) also jumped on the back of a bull in New York. The Dow Jones traded at $20082 for the first time, as the S&P 500 recorded a new all-time high at $2299.
The US stock futures extended gains throughout the overnight trading session, as Asian traders joined the euphoria. The US stocks are set to renew record at the US open.
The rush to the banking stocks continued in Tokyo, as Nikkei financials surged 3.01%. Mitsubishi Corp. (T:8058) (+4.33%) and Mizuho Financial Group Inc (NYSE:MFG) (+3.00) lead gains, as life/health insurers soared 4.39%. Technology (+3.07%) and mining stocks (+2.20%) reinforced the rally in Japan and Australia. Iron ore futures gained nearly 10%, WTI crude and Brent crude firmed 0.82% and 0.85% respectively.
The AUD/USD rebounded from the 200-day moving average (0.7515) yesterday, hinting that the 200-dma level convinced carry traders to open new long positions at the current rates. The pair consolidated gains within 0.7563/0.7585 in Sydney, as the US treasury yields remained steady above 2.50% and capped the upside.
Firmer oil and commodity prices had a positive reflect on the FTSE 100 futures (+0.20%), yet the stronger pound somewhat dented the appetite in the UK equity futures. Still, the UK stocks are set for a positive open in London, yet could remain slightly behind their European peers.
Among the G10 currencies, the pound (+0.11%) has been the only gainer against the greenback overnight. Cable broke the 1.2575 resistance and rallied to 1.2663 for the first time since mid-December. Traders now look at 1.2774 (Dec 5th high), as the 200-day moving average is less than 3 figures away, 1.2900. The UK’s fourth quarter GDP data is due today. According to Bloomberg, today’s print could ‘give more zip to the pound’s recent rally’, as the gross domestic product is on the best run in almost eight years since the pound fell below 1.20 on January 16th. Again, we could barely see any negative Brexit impact. On Friday, UK PM Theresa May will meet the freshly elected US President Donald Trump to seek opportunities for a deal between the two countries, both facing protectionism and isolation. The UK’s EU exit could result in a better than otherwise deal with one of its leading historical partner, nevertheless, the fact that May is under a heavy Brexit pressure would also increase the risk of a disappointing deal.
Gold slipped to $1193 on the back of a stronger US dollar. The next support to the developing downside move is eyed at $1180.
Meanwhile, the US dollar rally barely convinced the yen to give away its recent gains. The USD/JPY continues trading below the 114.00 handle before the Japanese inflation data due on Friday.
Finally, the Hang Seng (+1.31%) benefited from the global risk-on mood, while Shanghai Composite (+0.28%) remained on the back foot at the last day of trading before the Chinese New Year holidays. News that China would order banks to curb new loans in the first quarter had a muted impact on the Yuan. The offshore Renminbi remained rangebound.