Equity Markets Consolidate After Multi-Day Rally

Equity Markets Consolidate After Multi-Day Rally

11 Jan 2019

Equity markets where mixed on Friday with some Asian bourses rising while most of Europe is in the red. Chinese and US negotiations look like they will continue in the middle of the month as a Chinese envoy will travel to Washington. Australian November retail sales came out stronger than expected, while Japan reported a wider than expected trade figure. In the US on Thursday Jobless claims were released and showed a larger decline than expected as well as Natural gas inventories which also showed a greater than expected draw.

Australian Reported Better than Expected Retail Sales

Australia reported November retail sales that rose 0.4% month over month compared to expectations that it would increase by 0.3%.  The improved market sentiment also helped AUD move high hitting the highest levels since mid-December. Japan reported November trade and current account data on Friday.  The adjusted current account surplus was JPY1.4 trillion versus expectations that it would increase by  JPY1.1 trillion.  

China's Vice Premier Liu He reported that he will travel to Washington at the end of the month and meet with US Trade Representative Lighthizer and Treasury Secretary Mnuchin for the next round of trade talks.  The non-tariff barriers, including technology transfers, require higher levels talks, but the underlying optimism continues showing both sides want a deal. 

Natural Gas Inventories Declined More than Expected

The EIA reported that working gas in storage was 2,614 Bcf as of Friday, January 4, 2019. This represents a net decrease of 91 Bcf from the previous week, compared to expectations that inventories would decline by 68 Bcf according to Estimize. Stocks were 204 Bcf less than last year at this time and 464 Bcf below the five-year average of 3,078 Bcf. At 2,614 Bcf, the total working gas is below the five-year historical range.


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