Global Markets Overview - April 1, 2016

By @chelean on
Australian Securities Exchange (ASX)
People walk past the Australian Securities Exchange (ASX) building in central Sydney October 20, 2008. Reuters/Daniel Munoz

Quarter down, three to go

March trading ended with a flurry – it was the best month on the ASX since  July 15 , adding 4.03%, and was actually a very tidy month for most markets.

The month of March

·          Oil had its best month since April last year, adding 13% from talk of OPEC deals and record low rig counts in the US

·          SPX had its best month since  October 15 , up 6.6% as rate hike expectations disappeared

·          DAX added 4.95%, which was its best month in a year from Draghi’s ‘helicopter funding’, a positive for the largest economy in Europe

·          USD had its worst month since  April 15 . losing 3.5% (a good thing for US economics) as Yellen quashed hawkish talk that the Fed may raise rates in June

·          AUD/USD added 7.3% as the ‘Perfect Storm’ trade fully flows (see https://www.ig.com/au/market-update/2016/03/08/the-aud-perfect-storm-becoming-a-thunderstorm-31155), but this is not good news for Australian economics

The month of April

·          The S&P has seen nine of the past ten Aprils in positive territory, with an average 2.68% growth which is 0.5% better than any other month

·          The ASX has seen seven of the past ten Aprils in positive territory, with an average of 1.97% growth which is 0.3% better than any other month

However, the quarterly numbers tell a very different story. January was the worst start to a year on record for the ASX and the worst start to a year on the All Ordinaries in over 30 years.

The extreme pessimism around China, oil and global growth put all markets on the back foot to start 2016, however the recovery difference between global markets has been stark.

First quarter

·          ASX was down 4.04% on the quarter in local currency terms in USD terms, however it did outperform global peers, adding 1.2%

·          FTSE lost 1.08% over the quarter in USD terms, losing 3.6% as the GBP got smashed on Brexit fears

·          DAX lost 7.3% over the quarter, however in USD terms it only lost 2.8%. The EUR jumped in March as the rate cut cycle by the European Central Bank appears over with Mario Draghi mauling even more drastic measures in ‘helicopter funding’

·          The Dow added 1.5% over the quarter and reached a year-to-date high on 30 March as a ‘two-speed’ US economy and very low inflation sees the Fed backing off rate hikes in 2016 – adding to risk trading. It was the biggest quarterly comeback in the US since 1993

·          Crude added 3% over the quarter, however the range paints the story of the quarter with a low in the US$27 handle and a high in the US$42 a handle. The extreme swings are unlikely to disappear in Q2

Second quarter

·          Historically, May is a poor month for the SPX. The old adage of ‘sell in May go away’ is a truism; the average over the past ten year has only been a 0.4% decline. However, June is historically the worse month of the year; the average declines in June have been 1.53% over the past ten years.

·          It’s the reverse for the ASX, with May averaging a 2.3% decline over the past ten years which is clearly the worst month over the year. June is averaging a 1.77% decline over the past ten years, to be the third worst month of the year behind November.

With today being April fool’s day, history suggests that April could be making a fool of second quarter trading.

Asian markets opening call

Price at  8:00am AEDT

Change from the Offical market close

Percentage Change

Australia 200 cash (ASX 200)

5,061.40

-21

-0.42%

Japan 225 (Nikkei)

16,781.50

24

0.14%

Hong Kong HS 50 cash (Hang Seng)

20,777.70

1

0.00%

China H-shares cash

9,004.60

1

0.01%

Singapore Blue Chip cash (MSCI Singapore)

321.49

0

0.14%

Futures Markets

Price at  8:00am AEDT

Change Since Australian Market Close

Percentage Change

Dow Jones Futures (June)

17,606.00

0.50

0.00%

S&P Futures (June)

2,052.25

-1.13

-0.05%

ASX SPI Futures (June)

5,046.00

-24.50

-0.47%

NKY 225 Futures  (June)

16,835.00

-115.00

-0.68%

Key inputs for the upcoming Australian trading session (Change are from  16:00 AEDT )

Price at  8:00am AEDT

Change Since Australian Market Close

Percentage Change

AUD/USD

$0.7667

0.0012

0.16%

USD/JPY

¥112.540

0.210

0.19%

Rio Tinto Plc (London)

£19.83

0.09

0.48%

BHP Billiton Plc (London)

£7.84

-0.10

-1.22%

BHP Billiton Ltd. ADR (US) (AUD)

$16.89

0.03

0.19%

Commonwealth Bank ADR (US) (AUD)

$74.94

0.02

0.02%

Metals Exchanges                                                                      (Change are from  16:00 AEDT )

Price at  8:00am AEDT

Change Since Australian Market Close

Percentage Change

Gold (spot)

$1,232.70

4.15

0.34%

Brent Crude (May)

$39.59

0.77

1.97%

Aluminium (London)

1521

24.00

1.60%

Copper (London)

4856.5

-16.50

-0.34%

Nickel (London)

8495

50.00

0.59%

Zinc (London)

1815

17.00

0.95%

Iron Ore (62%Fe Qingdao)

$53.75

-0.43

-0.79%

IG Iron Ore (CNH)

¥397.45

15.00

3.92%

 

IG provides round-the-clock CFD trading on currencies, indices and commodities.  The levels quoted in this email are the latest tradeable price for each market.  The net change for each market is referenced from the corresponding tradeable level at yesterday’s close of the ASX. These levels are specifically tailored for the Australian trader and take into account the 24hr nature of global markets.  
  
Please contact IG if you require market commentary or the latest dealing price.

 

EVAN LUCAS
Market Strategist

IG, Level 15, 55 Collins Street, Melbourne VIC 3000
D: +61398601748 | T: +61398601711
www.ig.com

IG Markets

 

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