Aust dollar extends post-GDP rally

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The Australian dollar has become the best performing currency overnight and is now targeting US73c after surprisingly positive growth data.

At 7.00am (AEDT) on Thursday, the local unit was trading at US72.96c, up from US72.40c on Wednesday.

Wednesday’s gross domestic product figures showed that the economy expanded 3.0 per cent through 2015.

This allayed fears that the slowdown in China would wreak havoc on the local economy, BK Asset Management’s managing director of FX strategy Boris Schlossberg said.

The growth was driven by consumer and government spending, which is offsetting declines in capital spending due to the mining sector’s contraction, he said.

“Over the past six months, the annualised growth of Australian GDP stands at 3.4 per cent,” he said.

“(That’s) one of the best rates in the G20 universe and goes a long way towards explaining the relatively sanguine view of the Reserve Bank.”

After leaving the cash rate unchanged on Tuesday, the RBA appeared nonplussed by the China risks, giving the impression that, short term, rates are likely to remain on hold.

Source: Bloomberg

Oil Ends at Two-Month High as Refineries Boost Crude Use

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Oil ended at the highest level in almost two months in New York after a government report showed U.S. refineries boosted their use of crude.

West Texas Intermediate futures rose for a third day after the Energy Information Administration said fuel plants processed 16 million barrels a day of crude last week, the highest level for this time of year in data going back to 1989. Gasoline inventories fell by 1.47 million barrels.

Crude has surged 32 percent since closing at a 12-year low on Feb. 11 on speculation low gasoline prices will boost demand. Russian oil producers met with President Vladimir Putin to pledge support for a plan agreed with Saudi Arabia and other nations to freeze output at January levels. U.S. crude inventories rose by 10.37 million to the highest since 1930, the EIA said.

WTI for April delivery gained 26 cents, or 0.8 percent, to $34.66 a barrel on the New York Mercantile Exchange, the highest settlement since Jan. 5.

Brent for May settlement climbed 12 cents to $36.93 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude was at a premium of 63 cents to WTI for May.

Source: Bloomberg

Hong Kong Shares Hit 7-Week High on Global, Mainland China Market Strength (Riview)

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Hong Kong stocks jumped over 3 percent on Wednesday to their highest level in seven weeks, with investor sentiment lifted by strength in global markets as well as a more than 4 percent jump in mainland China shares.

The Hang Seng index rose 3.1 percent to 20,003.49 points, while the China Enterprises Index gained 3.8 percent to 8,374.09 points.

All main sectors rose, with energy and resources sectors among the biggest gainers, jumping nearly 4 percent.

China stocks had their best day in four months, as investors piled into real estate and resources shares, encouraged by tentative signs of recovery in the property market. Investors shrugged off news that rating agency Moody's cut its China outlook to "negative" from "stable", as the market awaits policy cues from China's annual meeting of top legislatures that starts March 5.

Source : Reuters

U.S. Stocks Add to 8-Week Highs as Banks, Energy Continue Rally

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U.S. stocks advanced, extending their eight-week highs with banks and energy shares rallying for a second day as improving data bolstered optimism on the economy.

The Standard & Poor’s 500 Index rose 0.4 percent to 1,986.36 at 4 p.m. in New York, holding at the highest since Jan. 6. The gauge surged 2.4 percent yesterday, the most in more than a month. The Russell 2000 Index jumped 1.1 percent.

A report today showed companies in the U.S. added more workers than forecast to their payrolls, another positive signal on the economy after gauges showing stability at American factories, major carmakers and in the public and private construction industries helped spur a rally yesterday. The improving data has also raised the odds the Federal Reserve will boost borrowing costs this year.

The S&P 500 has trimmed its 2016 decline to less than 3 percent, from more than 10 percent, amid a recovery from a 22-month low on Feb. 11. The benchmark is down 6.8 percent from an all-time high reached last May.

In Tuesday’s votes, Donald Trump and Hillary Clinton solidified their positions in the race to their parties’ presidential nominations. The impact on trading was muddied as global equities rebounded on the U.S. economic data and amid stability in China markets that spurred risk-taking.

Source: Bloomberg

U.S. Stocks Fluctuate Following Jobs Report as Crude Recovers

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U.S. stocks fluctuated following a rebound in crude prices and energy shares. Treasuries slid while the dollar strengthened, after a jobs report bolstered speculation that the Federal Reserve will raise interest rates this year.

The Standard & Poor’s 500 Index retreated 0.1 percent after the benchmark rallied yesterday. Oil traded near its highest close in eight weeks after data showed U.S. refineries boosted their use of crude and gasoline inventories fell. The dollar advanced against the euro for a fourth day after a private payrolls report showed companies added more workers than projected last month. The yield on the 10-year Treasury note rose to the highest in a month.

Markets are taking cues from the potential for more central-bank stimulus and signs economic pessimism that dominated the start of the year was overdone. The private payrolls report follows data on Tuesday that signaled manufacturing was steadying. Citigroup Inc.’s U.S. Economic Surprise Index, which measures whether data beats or misses estimates, is at the highest level since November. In China, moves such as ruling out the possibility of a one-off yuan devaluation and a new head of the securities regulator are also helping investors win back confidence.

The S&P 500 traded at around 1,977 at 12:43 p.m. in New York, after the benchmark gauge on Tuesday posted its best session in a month. Energy shares and banks were the best-performing groups, while retailers and raw-material companies were the biggest drag on the index. The Chicago Board Options Exchange Index, the gauge of market turbulence known as the VIX, fell a second day after sliding yesterday to the lowest level this year.

Source: Bloomberg