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API rains on WTI’s parade, China trade data on the way

So far the API damage appears to be contained to crude oil with traders likely awaiting confirmation from tomorrow’s DOE report as both numbers can be volatile week to week. CAD and stocks had benefitted from Tuesday’s oil rally and so far those markets have continued to hold up. CAD may remain active through tomorrow’s Bank of Canada meeting. With Canada retail sales growing 2.1%, core at CPI 1.9%, Jan GDP up 1.5%, housing starts above 200K, and 40K jobs added last month including 35K full time there’s no reason for the central bank to cut rates and with CAD having bounced back dramatically since the last meeting, there’s no reason for a rate hike either. Based on this, the Bank of Canada looks likely to take a neutral stance and not make any policy changes.  

The commodity rally has broadened out from crude oil to include metals like copper and grains like corn and wheat, which could influence trading in Australian resource stocks today. The resource weighted Canada markets rose 1.5% on the day outpacing the Dow’s 1.0% gain to the upside. Australian and Chinese stocks, AUD, NZD, copper and other China sensitive markets may also be active today around the China trade and New Zealand food price reports.

Corporate News

Valeant Pharmaceuticals    received a notice of default from some of its bondholders demanding it file its 10-K annual report by June 16th. The company indicated it plans to file the report by April 29th.

Economic News

Significant announcements released overnight include:

IMF Global GDP forecast
    2016            cut to 3.2% from 3.4%
    2017            cut to 3.5% from 3.6%
IMF US GDP forecast
    2016            cut to 2.4% from 2.6%
    2017            cut to 2.5% from 2.6%

US API crude oil inventories    6.2 mmbbls vs street 0.7 mmbbls
EIA US crude oil production    fell by 90,000 bbl/d in March 2016

China foreign direct investment    7.8% vs street 2.4%

US import prices        (6.2%) vs street (4.8%) and previous (6.1%)


Latest ICM Brexit referendum poll Leave 45% (up 2%) Remain 42% (down 2%) undecided 12%.    

UK consumer prices        0.5% vs street 0.4%
UK core CPI            1.5% vs street 1.3%
UK retail prices            1.6% vs street 1.4%
UK producer input prices    (6.5%) vs street (6.2%) and previous (8.1%)
UK producer output prices    (0.9%) vs street (1.0%)
UK ONS house prices        7.6% vs previous 7.9%

UK same store sales        (0.7%) vs street 2.0% and previous 0.1%

Germany consumer prices    0.3% as expected
Sweden consumer prices    0.8% vs street 0.7% and previous 0.4%

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)  

8:45 am AEST        NZ Food prices            previous (0.6%)
9:50 am AEST        Japan producer prices        street (3.5%)
11:30 am AEST        Australia consumer conf        previous 99.1

TBA            China trade balance        street $34.9B
TBA            China exports            street 10.0% vs previous (25.4%)
TBA            China imports            street (10.1%) vs previous (13.8%)

7:45 am BST        France consumer prices        street (0.2%)
8:00 am BST        Spain consumer prices        street (0.8%)
10:00 am BST        Eurozone industrial production    street 1.3%

8:30 am EDT        US retail sales            street 0.1%
8:30 am EDT        US retail ex auto        street 0.4%
8:30 am EDT        US producer prices        street 0.3%
8:30 am EDT        US core PPI            street 1.3%

10:00 am EDT        Canada interest rate        0.50% no change expected
10:00 am EDT        Bank of Canada Poloz, Wilkins speaking

10:30 am EDT        US DOE crude oil inventories    street 1.0 mmbbls vs previous (4.9 mmbbls)
10:30 am EDT        US DOE gasoline inventories     street (1.5 mmbbls)

2:00 pm EDT        Fed Beige Book


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