US markets sold off last night with Tech and growth stocks particularly hard hit. The Nasdaq posted its worst day since March. Tech stocks came under heavy selling pressure as traders rotated away from growth stocks into value stocks on expectations inflation will rise in line with the global economic recovery.
With a quarterly earnings season, that has seen strong results, winding down, investors are contemplating the next catalyst for equities. With Commodity prices continuing to rise inflation concerns have come to the fore.
There is a quiet day ahead in scheduled economic releases with only the Australian budget released tonight being of any consequence.
The Treasurer is expected to announce a budget in far better shape than forecast, with a rapid recovery of the labour market and records iron ore prices lifting revenues and greatly reducing the deficit that was previously forecast to be around $200 billion.
FX markets had a volatile ride last night, with an initial sell-off in the US dollar reversing later in the session as inflation fears surfaced.
Risk on pair AUDUSD broke its US 0.78.c resistance level, rising almost to 0.79c before retreating as equity markets started to sell-off.
GBPUSD also strongly broke out of its 3-month range, rising to its highest level against the greenback since February. This continues the strong rally at the end of last week on the back of a stronger than expected showing for the pro-business Tories in local elections.
Wednesday, 12 May 2021 – Indicative Index Dividends
Dividends are in Points
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