Select the account you'd like to open

Brent golden cross, retailer earnings, Bank of England and Norges Bank in focus

Brent golden cross, retailer earnings, Bank of England and Norges Bank in focus

A back and forth week for stocks continues this morning with indices shrugging off yesterday’s declines overnight. This morning finds US index futures for the Dow, S&P and NASDAQ up 0.4%-0.5%, the Dax up 0.6% and the FTSE flat ahead of today’s Bank of England meeting and comments from Governor Carney on the UK economy, monetary policy, and the potential impact of next month’s Brexit referendum. Crude oil is climbing again today after the International Energy Agency indicated stronger than expected demand growth and supply disruptions are helping to bring the oil market back into balance. It also indicated it expects oil inventories to drop significantly in the second half of this year. WTI and Brent are both up about 1.5% on the news with Brent completing a golden cross today to confirm an uptrend is underway. Metals are mixed today with gold falling back along with other defensive plays like JPY while copper continues to steadily bounce back. The Bank of England maintained its current interest rate and QE levels in a unanimous vote. Traders had been expecting Governor Carney to sit on his hands again with the Brexit referendum coming next month. In its inflation report, the bank cut its GDP growth forecast to 2.0% from 2.2% and suggested that a vote to leave in the Brexit referendum could lead to a decrease in growth and a rise in inflation. It also suggested Sterling could fall in a Brexit scenario and suggested half of the decline in GBP since November had been due to uncertainty over the vote. GBP popped briefly on the next but has slipped back while the FTSE has held onto the gains made ahead of the announcement. This suggests that the Bank’s forecasts and comments were pretty much what traders expected them to say, although additional gloomy outlook comments on Brexit risks from Governor Carney have started to drag further on GBP. NOK is one of the top performing currencies on the day after Norges Bank maintained its benchmark rate at 0.5%. Although Governor Olsen hinted the central bank could bring in negative interest rates if needed, those comments were discounted by traders. Between the continuing oil rally and a much stronger than expected Norwegian GDP report it appears emergency measures likely won’t be needed any time soon. In stock action today we may see a continued focus on retailers. Canadian Tire beat the street suggesting the business environment for retailers may have been better in Canada than the US this morning. In the US, Kohl’s earnings miss and negative same store sales confirmed yesterday’s poor results from Macy’s with other major US retailers scheduled to report later in the day. Energy and mining stocks may also be active on commodity price action, particularly pipelines after Enbridge released strong than expected earnings. Corporate News Canadian Tire $0.90 vs street $0.84 Enbridge $0.76 vs street $0.65 Kohl’s $0.31 vs street $0.37, same store sales (3.9%) Economic News Significant announcements released overnight include: Bank of England interest rate and QE 0.50% and £375B no change as expected, 9-0 votes as expected Bank of England forecasts 2016 GDP cut to 2.0% from 2.2% Q2 GDP cut to 0.3% from 0.5% 2016 inflation maintained at 0.4% expected to rise to 2.1% in two years Norway interest rate 0.50% no change as expected Germany wholesale prices (2.7%) vs street (2.6%) Sweden unemployment rate 3.8% as expected vs previous 4.0% France consumer prices (0.2%) as expected Sweden consumer prices 0.8% vs street 0.9% Norway GDP 1.0% vs street 0.1% Norway mainland GDP 0.3% vs street 0.2% Eurozone industrial production 0.2% vs street 0.9% Greece unemployment rate 24.2% vs street 24.3% NZ BusinessNZ PMI 56.5 vs previous 54.7 NZ food prices 0.3% vs previous 0.5% Australia inflation estimate 3.2% vs previous 3.6% Announcements due later today include: 8:30 am EDT US import prices street (5.4%) vs previous (6.2%) 8:30 am EDT US jobless claims street 270K 8:30 am EDT Canada new house prices street 1.9% 10:30 am EDT US natural gas street 58 BCF 11:00 am EDT FOMC Mester speaking 11:45 am EDT FOMC Rosengren speaking 2:15 pm EDT FOMC George speaking

Disclaimer: CMC Markets is an order execution-only service. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.

Sign up for market update emails