Morning Briefing: World markets broadly higher despite weaker commodities

World markets broadly higher despite weaker commodities
Investors are still awaiting details of President Trump’s tax reforms but for now the record highs for Wall Street and regional issues are dominating the markets; shaking-off declining prices for oil, gold and many other commodities.

Asian markets closed mostly higher with Japan’s Nikkei flat despite strong gains for Toshiba on a potentially high valuation for its chip unit. Sydney gained following comments from the central bank that interest rates are unlikely to be cut again soon.

European markets are focusing on data and corporates. Eurozone CPI hit expectations but the UK’s GDP was down year-over-year in the fourth quarter (up quarter-over-quarter). There is better news for UK exports which soared at the end of 2016, doubling expectation, amid a weaker pound.

Wall Street and Toronto are expected to open higher. US homes data and Canadian retail sales figures are due.
 

	Latest	1 month ago	1 year ago
North America (previous session)
US Dow Jones	20,743.00 (+0.58 per cent)	+4.62 per cent	+24.80 per cent
TSX Composite	15,922.37 (+0.53 per cent)	+2.41 per cent	+23.95 per cent
Europe (at 5.00am ET)
UK FTSE	7,288.08 (+0.18 per cent)	+1.25 per cent	+20.71 per cent
German DAX	11,976.37 (+0.07 per cent)	+2.98 per cent	+25.10 per cent
Asia (at close)
China CSI 300	3,489.76 (+0.20 per cent)	+4.02 per cent	+11.89 per cent
Japan Nikkei	19,379.87 (-0.01 per cent)	+1.26 per cent	+20.29 per cent
Other Data (at 5.00am ET)
Oil (Brent)	Oil (WTI)	Gold	Can. Dollar
56.29 (-0.65 per cent)	54.02 (+0.57 per cent)	1238.70 (-0.02 per cent)	U$0.7599
			Aus. Dollar
			U$0.7686

Commodities need to show increased demand says Goldman Sachs
While commodities have seen some gains recently from geopolitical activity, what is required now are signs of increased demand.

Goldman Sachs released a client note late Tuesday which calls for proof that the OPEC output cut is really decreasing the supply glut.

"Markets need to see that the OPEC supply cuts generate real inventory draws and the strong manufacturing survey and Chinese credit data create real activity. In other words, 'show me the activity:' real demand, real stock draws and empty warehouses," the note says.

Goldman remains subdued in its expectation for gold prices with its 3, 6 and 12 month outlooks roughly in line with current prices.