Waiting for News
Today the US appeared to be stuck waiting for news. Equity markets rallied in the US and that was based upon some good reported results and in particular Home Depot. The results of both Walmart and Home Depot helped to bolster confidence that the consumer has not exited retail.
The day was good for dollar bulls. A “Federal Reserve policy maker reinforced the chances for a U.S. interest rate increase as soon as next month” (Bloomberg) the dollar responded and gold slumped.
Meanwhile the U.S. Treasury market was unchanged the 10 year treasury traded to 2.42% up 1 bp. Normally a confirmation of a rate hike would send rates higher albeit marginally.
Stocks are continuing to rally and that partly an improving retail outlook and also technical. Kraft‘s failure to take over Unilever has the U.S. market in a spin as investors are expecting Kraft to launch a takeover on an as yet unknown party.
What is interesting to note is that more and more investors are looking for detail on Trump’s Tax Plan and detail on infrastructure. With that as an unknown it’s only a matter of time before questions are asked and time runs out. Policy is starting to become an issue.
Aussie Market Today.
The Aussie market should see equities continue to rally. Bonds will be relatively stable, maybe a slight weakening and credit will remain around current levels with a slight tightening. Generally though credit remains bid as investors continue to seek returns. The hunt for yield continues.