Fundamental wrap: markets reverse risk-off Friday

From a fundamental basis, the markets have got on with it on Monday, shrugging off the Middle East risk and have prefered to focus on earnings on Wall Street that have got off to a good start for Q1 while markets assess the outlook for Central Banks, the reflation trade and the global economy. 

US stocks were rallying on Monday, unwinding Friday's risk-off losses as the Syrian tensions ease.

The Dow Jones Industrial Average climbed through the 50-day MA located at 24,604 currently. Similarly, the S&P 500 was up by 1.1% closing in on its 50-day MA as well. The DXY was having a tough day while commodities struck back and the US yield curve flattens signalling a less expansionary path and markets have a rethink of the reflation trade in a quieter FX space to start the week where data was mixed. Retails sales was a beat but were offset by the miss in the Empire States Fed survey.

Key headlines: (sources, State TV, Livesqwark, WP).

  • Saudis intercept ballistic missile over Najran – State TV
  • Trump said to halt plan for more Russia sanctions – WP
  • Fed's Kaplan now crossing the wires: expects 3 rate hikes 2018.
  • Fed's Bostic: Fed has not seen much movement in wages.
  • Fed's Dudley: could alter gradual hike path, more than 4 hikes in 2018 unlikely.
  • Fed's Kashkari: wages growing slowly, suggesting slack still exists.
  • Fed's Kaplan: cyclical wage pressures will build in 2018; sees 3 hikes this year.
  • Trump nominates Richard Clarida, Michelle Bowman to Fed board.
  • Trump walks back plan for more Russian sanctions, reversing Haley's speech.
  • Trump swipes at Russian and Chinese currency 'devaluations'.
  • Atlanta fed GDPnow for 1q18 falls below 2pct to 1.9pct.

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