|09:00||EUR||ECB Economic Bulletin|
|10:00||EUR||EU Economic Forecasts|
|16:30||CHF||SNB Chairman Jordan Speaks|
|00:30 (Nov 10th)||AUD||RBA Monetary Policy Statement|
Asian markets endured a choppy session Wednesday before ending the day mixed and little changed for the most part. A weak lead-in from the lackluster session in the U.S., and concerns over the ultimate form of U.S. tax reform kept investors uncertain, causing some profit taking from current multi-year highs in many of the regions markets. Australia’s benchmark S&P/ASX 200 held on to a 9-year high as it edged slightly higher, but the Nikkei in Japan slipped from a 26-year high as currency headwinds pushed equities modestly lower. Hong Kong’s Hang Seng also slipped from its own 10-year high, giving back early gains as profit taking set in. Still, with corporate earnings remaining strong, and the global economy improving, the upward trend in Asian equity markets is likely to remain intact.
European markets were also choppy, with selling pressure evident and the broadest measure of European markets ending the day in the red. On a country specific basis markets ended little changed, but mixed between gains and losses. The financial sector was one of the weaker areas, as falling European bond yields are causing a headwind for banks. The technology sector also showed weakness. London’s FTSE pulled out a winning session however, with a rally in the retail sector combining with a weaker Pound to lift equities.
U.S. markets spent the day trading near unchanged levels as investors are wary ahead of the passage of the tax reform bill. A late day rally lifted markets however, and all three of the major benchmark indices ended the day in positive territory and at new record closing highs. Also of concern to investors currently is the outcome of President Trump’s Asian tour. The tour is widely considered his most important diplomatic mission to date, and the results could have long standing implications for relations between the U.S. and its Asian allies. Consumer staples and technology showed strength on the day, but the financial sector fell for a second consecutive day as U.S. bond yields continue retreating.
While palladium already up some 50% this year, its move above the $1,000 level on Wednesday was a sign of increased bullishness for the precious and industrial metal. Strong global demand and tight supplies have helped lift the metal this far, and that picture hasn’t changed, especially with news of rising auto demand from China. Palladium is used extensively in catalytic convertors to convert noxious gases in exhaust to less harmful substances. Chinese auto growth is especially beneficial for palladium producers due to the rapidly growing middle class in the Asian powerhouse. With the Chinese economy back on a stronger growth path the fundamentals for palladium should remain strong as there are limited supply sources, and finding raw deposits of palladium in the wild is rare.
The big news in Bitcoin today is the cancellation of the highly anticipated, and highly contentious, Segwit2x hard fork that would have split Bitcoin into two separate blockchains, creating a second coin in the process. The developers behind the Segwit2x movement commented “it is clear that we have not built sufficient consensus for a clean block size upgrade at this time. Continuing on the current path could divide the community and be a setback to Bitcoin’s growth. This was never the goal of Segwit2x.” It was thought that recent gains for Bitcoin were due to speculators accumulating coins ahead of the split in Bitcoin so they could take advantage of the additional coins created, but that seems not to be the case as Bitcoin has rallied following the hard fork cancellation, and is now looking to retest the $7,500 level.