U.S. Futures, Asia Stocks Rise as Treasuries Rally

10/06/2021 Most Asian markets are up this morning as U.S.-China talks helped sentiment and bolstered the offshore yuan. Treasuries rallied ahead of a U.S. inflation report that may provide clues on the monetary policy outlook. Traders are waiting to see if the upcoming U.S. inflation print changes perceptions of when the Federal Reserve might begin talks about tapering asset purchases. Global equities for now are hovering around an all-time high.

Here are key events to watch this week:

• U.S. consumer price index today.
• European Central Bank decision today and press conference with President Christine Lagarde.
• Iran nuclear deal talks reconvene in Vienna.
• Group of Seven leaders’ summit starts in Cornwall, England Friday.

Locally the JSE Allshare closed just in the green up 0.05% after an afternoon rally, SA Inc names ahd a really good day with the Banking Index up 3.02%, Propert up 1.86% and the FINDI up 2.52%. Resources held the market back with the RESI down 1.44%, AGL and BHP the big losers down 2.78 and 1.87 percent respectively.
The South African Reserve Bank releases current-account data for the first quarter at 11 a.m. Current-account balance as a percentage of gross domestic product seen at a surplus of 4.3% in Bloomberg survey, compared with 3.7% in fourth quarter.

• Sanlam New Business Volumes in 4 Months to April 20% Higher Y/Y
• S. African Banks, Retailers Gain as Economic Data Buoy Sentiment
• Bid Corp. Sales in Last Week of May Return to Pre-Covid ‘Normal’

MEDIA SUMMARIES:

• Mail & Guardian: SAA will have a strategic equity partner by August, says public enterprises department
• Business Day.za: Mkhize pushed health regulator and FDA to release J&J shots before leaving
• Daily Maverick: Minister Mkhize‘s special leave also creates many special problems
• Business Day.za: PIC chief Abel Sithole orders probe into poultry producer exec

EARNINGS:

• Foschini Group Ltd, MultiChoice Group

ECONOMIC DATA:

• 11am: 1Q Current-account balance as a % GDP, est. 4.2%, prior 3.7%
• 11am: 1Q Current-account balance, est. 209b rand, prior 198b rand
• 11:30am: April mining production MoM, prior 4.5%
• 11:30am: April mining production YoY, est. 110%, prior 21.3%
• 11:30am: April platinum production YoY, prior 68.6%
• 11:30am: April gold production YoY, prior 10.5%
• 1pm: April manufacturing prod SA MoM, est. 0.5%, prior 3.4%
• 1pm: April manufacturing prod NSA YoY, est. 88.5%, prior 4.6%

European markets are looking to open a little softer as global markets gear up for the latest inflation reading from the U.S. Investors in Europe are also gearing up for the next meeting of the European Central Bank later today, with most expecting the central bank to keep its foot on the stimulus pedal. Many believe the ECB will keep to its current path due to an uncertain economic outlook and to avoid an unwanted tightening of financial conditions. At today’s meeting, the ECB will also update its quarterly staff projections for inflation and growth, alongside its traditional rate decision and press conference. The interest rate decision is announced at 12:45 pm London time.
Overnight in the US, markets continued to trade within a tight range on Wednesday, with all three major indexes ending the day within 0.5% of Tuesday’s closing levels. The Dow, S&P 500 and Nasdaq Composite all fell during regular trading, ending the session further away from their respective all-time highs. The S&P 500 remains closest to its benchmark and is just 0.44% away from a new all-time high. The Dow and Nasdaq are roughly 2% away from records. The Dow closed down 152 points, the S&P down 7 points and the Nasdaq down 14 points. CPI data is due at 14:30 local time, Economists polled by Dow Jones expect the May CPI report to show prices up 4.7% year over year after April’s increase of 4.2%.
Asia trades better across the region with the ASX 200 + 0.56%, Hang Seng + 0.18% and the Nikkei + 0.32%, MSCI’s broadest index of Asia-Pacific shares outside Japan climbed 0.57%.
Oil prices were lower in the afternoon of Asia trading hours with Brent down 0.76% at $ 71.68 and WTI down 0.70% at 69.45.
Gold spot is subdued this morning, weighed down by a firmer dollar, as investors sat on the sidelines waiting for clearer signals on inflation levels and economic growth ahead of U.S. data and the European Central Bank meeting later in the day. Gold spot is down 0.06% at $ 1887, Platinum under pressure down 0.81% at $ 1143 and Palladium up 0.20% at $ 2785.