Solid earnings from the financial sector over the past few sessions with Bank of America , Morgan Stanley , and also Goldman Sachs beating expectations has helped the markets to stabilise after the weakness and volatility last week. Trends on stock indices in Asia , Europe and the US have all been negative , but what we have seen is that the volatility has occured , but new lows have been rare , and now the selling pressure seems to be waning , the markets are now beginning to push higher. Markets are still fragile , but if we do not have any obvious unexpected events , then we should see the stock indices begin to push higher.
We are seeing further weakness in the US dollar , against most expectations , as the GBP rallies on hopes for a solid Brexit deal with the EU , and this gives most commodities room to rally which will help the AUD , CAD and NZD to move higher. Geopolitical events continue to bubble around the market with Saudia Arabia the latest with world condemnation about the apparent murder of a US resident Saudia journalist. This event has the potential to push the oil market much higher if the Saudis reduce any production which would slow the world economy sharply.
US bond yields remain at 3.15% for the 10 year and I expect it to stay in a 3.10-3.25% range until the market can see any change in policy from the US Fed.