Ample supply crushes crude oil, big day for mergers, AUD and NZD rally into Australia jobs
The big story in US and European trading today has been another plunge for crude oil where bulls confidence was crushed by a big increase in API inventories and reports that a lot more crude oil from Iraq is apparently making its way toward the US which could add to the glut of supply in the market.
There was no economic data out in North America today with government offices and banks closed for Remembrance Day / Veterans Day which kept trading quiet in the broader indices. There was a lot of market moving news from corporations, for whom the day was business as usual.
Much of traders focus was on the big brewers with two major transactions involving Anheuser Busch Inbev (up 3%), SAB Miller (up 1.6%) and Molson Coors (up 4.6%) shaking up the industry. SABMiller had rallied from £28.00 toward £40.00 in the last two months, so a takeover premium had already been built into the share price, while the street took Molson’s side deal to acquire the rest of MillerCoors as a positive surprise.
On the other hand, Apache fell 8.1% and Anadarko fell 4.0% after the latter pulled its takeover bid after failing to get any love from the former.
Macy’s plunged 15% after cutting Q4 guidance and signalling same store sales could fall 3% this holiday season, setting a negative tone for retailers earnings season. .
In currencies today, GBP rallied as stronger than expected UK employment growth suggested the Bank of England may need to move its interest rate liftoff timetable ahead once again after pushing out liftoff timing expectations last week.
AUD and NZD took advantage of a pause in USD’s drive higher to rebound ahead of employment and PMI figures. Canada and the US both showed big improvements in job creation last month and Australia could also potentially bounce back with the China situation stabilizing. To no surprise the retreat in WTI has weighed on CAD but perhaps not as much as one might have thought it would.
Tomorrow brings another round of FOMC speakers including the Big 3 of Yellen, Fischer and Dudley. Chicago Fed President Evans continued his scramble to get back on side from prior dovish leanings while San Francisco Fed president Williams suggested December could be the time for liftoff. Traders will be watching for any comments deviating from the current party line that December looks like a live meeting for potential rate liftoff.
There have been no major announcements after the US close today.
Significant announcements released overnight include:
UK jobless claims 3.3K vs street 1.4K
UK 3M employment change 177K vs street 120K
UK unemployment rate 5.3% vs street 5.4%
UK average weekly earnings 3.0% unchanged vs street 3.2%
UK earnings ex bonuses 2.5% vs street 2.7% and previous 2.8%
Upcoming significant economic announcements include:
(Note: 11:30 am in Sydney/Melbourne is currently 1:30 pm in Auckland, 4:30 pm in Vancouver, 7:30 pm in Toronto/Montréal, 12:30 am in London and 8:30 am in Singapore)
8:30 am AEDT NZ manufacturing PMI previous 55.4
8:45 am AEDT NZ food prices previous (0.5%)
11:00 am AEDT NZ consumer confidence previous 114.9
10:50 am AEDT Japan producer prices street (3.5%)
10:50 am AEDT Japan machine orders street 94.6%)
11:00 am AEDT Australia consumer inflation est previous 3.5%
11:30 am AEDT Australia jobs change street 15K vs previous (5K)
11:30 am AEDT Australia full time previous (14K)
11:30 am AEDT Australia part time previous 9K
11:30 am AEDT Australia unemployment rate street 6.2%
TBA China new Yuan loans street 800B vs previous 1,050B
7:00 am GMT Germany consumer prices street 0.3%
8:30 am GMT Sweden consumer prices street 0.1%
10:00 am GMT Eurozone industrial production street 1.3%
10:00 am GMT Greece unemployment rate street 24.9%
12:00 pm GMT India industrial production street 4.9% vs previous 6.4%
12:00 pm GMT India consumer prices street 4.9% vs previous 4.4%
8:30 am EST US jobless claims street 270K
8:30 am EST US continuing claims street 2,155K
8:30 am EST Canada new house prices street 1.3%
11:00 am EST US DOE crude oil inventories street 1.3 mmbbls
11:00 am EST US DOE gasoline inventories street (1.0 mmbbls)
11:00 am EST US DOE implied oil demand previous 15,696 mmbbls
9:05 am EST FOMC Bullard, Lacker speaking
9:30 am EST FOMC Yellen speaking
10:15 am EST FOMC Evans speaking
12:10 pm EST FOMC Dudley speaking
6:00 pm EST FOMC Fischer speaking
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