Daily Commentary BY THE CURVE TEAM –

Steady As She Goes

10th of April, 2018

There wasn’t much to emerge overnight that added to the volatility we have seen over the last period. Risk sentiment seems to have stabilised, the ECB expects robust growth for the remainder of the year and even Donald Trump had something positive to say for global market sentiment.

US equities were hit fairly hard last Friday based on indications of higher interest rates and inflation, which are not good for equity markets. However the market was buoyed yesterday and recouped some of Friday’s losses, edging up 0.3%. Risk sentiment appears to have settled, with the weight on the non-farm payrolls miss on Friday seemingly being less significant than how it was interpreted on Friday.

Interesting to note that US Libor (the overseas equivalent of AUS BBSW) fell overnight for the first time in 41 consecutive sessions. We have seen similar movements in our domestic BBSW since late February. The 3 month & 6 month BBSW have both risen ~14% since the end of Feb to sit at levels of 2.045% and 2.14% respectively as I write.

In Europe, ECB President Mario Draghi was brimming with confidence yesterday, imploring investors to remain patient that growth would prove strong for the remainder of this year despite lacklustre inflation.

In the US, there wasn’t anything of great significance to add to the well publicised trade spat between the US and China. President Trump however said that the Administration will probably come to an agreement with China so that sort of rhetoric is good for global sentiment.

Domestically today, most eyes will be on the NAB Business Conditions out at about 11.30am. The index has performed strongly in recent releases but more detail on the financial climate will be available in the Curve Monthly Insights released today, written by Oliver Parsons.

James Winder

Associate Director