Equities jump on the prospect of more stimulus

Published date: 19/06/2019

After the Trump and Draghi show yesterday the Fed have some act to follow tonight. After ECB president hinted at loosening ECB policy the US took to Twitter to show his dismay. The news from the ECB sent equities higher and risk sentiment overnight improved. Yesterday all three US bourses closed in the black with the Nasdaq leading the way up 1.39% and in the Asia Pac region it was much of the same. The Nikkei 225 rose 0.90%, while the ASX (1.19%) and Shanghai Comp. (1.09%) also headed in the right direction. 

Later in the US session yesterday we got the news that Boris Johnson is still leading the way to become the next conservative leader. He won the vote emphatically once again with former Brexit secretary Dominic Raab not gaining enough votes to pass to the next round.

Once again gold pulled back from elevated levels after the US dollar gained some momentum and risk sentiment improved. It was all going so well for the yellow metal early in the session but when Draghi stole the limelight USD strength kicked in and halted gold's progress.

The announcement of potential stimulus helped copper move higher. The Codelco workers are also still on strike too so any announcement of a resolution could pressure prices lower. There was also the news that the US and China are set to resume talks, at the moment analysts are taking these comments with a pinch of salt as it has been said before. 

Like copper, spot WTI rose off the back of decreased tensions and the prospect of stimulus. Adding to this news there was a draw in API inventory levels and any drop in inventory is good news at present. 

Today we are looking out for the Fed rate decision, UK & Canadian CPI, NZ GDP, comments from the FOMC and Draghi and Co.




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