Key Points

Bias: Risk neutral

Commentary

U.S. stocks bounced back overnight, retaking most of the losses from Friday. As a matter of fact, the DJIA had its best day in three weeks. The gains were prompted by slightly better than expected economic data and on hopes that this second Covid Virus wave won’t be as bad as previously feared. The data driver was New Home sales which were twice as good as expected.

Currencies were largely quiet overnight, with currency players not really believing the hype in the equity market. Sterling drifted up over the session on reports that PM Johnson will release an infrastructure spending plan tonight. Aussie was slightly weaker ahead of Chinese PMI numbers.

Oil prices shadowed equities higher over the day, while gold also finished on the plus side.

Bias

After the last few days who knows? Our call is that Asian equity markets will take a bid out of overnight trade in the U.S., while currency markets will await Chinese PMI numbers. Also on the data calendar today are Japanese Unemployment and Industrial Production, along with U.K. GDP, Swiss Retail Sales and Chicago PMI.

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