Anticipation of business-friendly steps, China data spur risk rally
All eyes on Trump-Abe meeting as corporate earnings, M&A underpin valuations
The dollar rose and US stock futures held near record highs as investors cheered upbeat Chinese trade data and hopes of business-friendly tax cuts in the US, although lingering concerns over political risks kept gains in check.
Strong Chinese trade numbers yesterday added to a sense that inflationary pressures could be stirring.
Evidence of Chinese growth lifted shares of commodity-related sectors, in particular blue chip mining, across Europe. Futures on the S&P 500 were up about 0.1 per cent. Wall Street’s three main indexes notched record highs overnight. European shares were poised to close the week about 1 per cent higher.
Healthy corporate results and the continued uptick in European deal-making, which is seeing its strongest start to the year in more than a decade, helped underpin valuations.
Meanwhile, analyst sentiment on European earnings is the brightest it has been in six years while in the US fourthquarter earnings are forecast to grow 8.5 per cent, according to Thomson Reuters I/B/E/S.
On the political front, the Focus shifted to a meeting later yesterday between Trump and Japan’s Prime Minister Shinzo Abe in which Abe is expected to propose a new cabinet level framework for US-Japan talks on trade, security and macroeconomic issues, including currencies.