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Vive le market!
9.18 am AEST Monday, 8 May 2017
Vive le market!
By Michael McCarthy (chief market strategist, CMC Markets)
A combination of strong data, recovering commodity prices and a win for centrist European politics should see Asia Pacific share markets regain ground today. Chinese trade data and Australian building approvals may influence trading, but the apparent reversal in risk sentiment could see markets receive the benefit of the doubt should they show weakness.
The economic risk of a radical win in the French presidential election passes with the election of the centrist Macron. However, markets edged higher in the lead up and the victory for economic rationalism represents the removal of a negative rather than a market propellant.
More importantly US employment data has swung risk appetites. The creation of 211,000 non-farm jobs in April reverses the previous month’s weakness and supports the Fed’s perception that soft first quarter data was a blip. Oil rallied alongside industrial metals. Gold continued its slide as investor confidence grows.
Futures markets indicate solid opening gains for local indices. The Australia 200 contract is up 55 points, reflecting the multiple positives after falls last week. The session may proceed cautiously ahead of regional data and the release of the federal budget statement tomorrow night.
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