US equities inched slightly higher yesterday, thanks to upbeat economic data in the US. Industrial production grew 1.1% in October, beating economists’ estimates of 0.9% growth. Housing Starts also beat expectations, growing to 1,365,000 in November. The recent slew of positive economic data in the US has helped subdue fears of a recession and has supported the Fed’s optimistic economic outlook for the US. Major indices in the US gained as a result on Tuesday
The renewed threat of a no-deal Brexit sent sterling freefalling on Tuesday. British Prime Minister Boris Johnson signalled yesterday he will be taking a hard line on trade talks with the EU during the transition period. He also said that he will not be requesting an extension to the December 31st 2020 transition deadline, which will effectively put a no-deal Brexit back on to the table.
Meanwhile, safe haven assets were mixed on the day, as investors weighed the risk from the renewed possibility of a no-deal Brexit and an improving US economy. Gold remained mostly flat, while the yen gained against the dollar. US Treasuries were mixed, with benchmark 10-year yields gaining 1bp to 2.31%.
In Asia, major indices started Wednesday’s trading session mixed, with the Nikkei opening 0.15% higher while the Straits Times Index was 0.18% lower. But Asian equities may face losses today, after paring out gains on Wednesday as concerns surrounding Brexit and the details of the US-China phase one trade deal heighten.
Today’s macro events include inflation rates from the UK, Eurozone and Canada at 1.30pm, 2pm and 5.30pm (GMT +4) respectively. Also, New Zealand’s GDP for Q3 2019 will be released tomorrow at 1.45am (GMT +4).