The last trading day of August and the Friday before a long weekend in North America finds US traders sitting on their hands to start the day. The S&P is holding steady at the 2,000 level while the Dow and NASDAQ are also holding with traders apparently reluctant to make waves before next week’s flurry of major announcements including PMI and payroll reports. We could see some action in the US later this morning around the Chicago PMI or consumer confidence reports which could set the tone for next week. Defensive plays are getting knocked back on their heels a bit with gold giving back some of yesterday’s gains and JPY falling against both USD and EUR. There hasn’t been any new news on the political front overnight, but war and peace driven swings come and go without warning these days. This month’s basket of Japanese economic indicators came in mixed and this indecision also weighed on the Nikkei. European indices are mixed to start the day trading close to flat for the most part. There has been a flood of economic numbers from across the continent this morning. The more important takeaway from all this has been that Eurozone inflation is steady. Earlier this week German officials suggested that inflation would really need to drop for the ECB to add to its current stimulus package (targeted LTROs for banks are coming in Sept and Dec), so a QE program announcement at next week’s ECB meeting looks unlikely. EUR has stabilized against USD and GBP on this news and is gaining ground on JPY. CAD is rallying again today boosted by better than expected Canadian GDP reports for June and for Q2 that indicate not only did the country’s economy bounce back from a rougher than usual winter, it is starting to reap some of the benefits of the expansion in the US. Next week looks to be a busy one with traders coming back from vacation to a busy week for news. September looks set to kick off with a flurry of announcements including global manufacturing and service PMI reports, North American employment numbers and central bank meetings in the UK, ECB and Australia. Note that due to the holiday, manufacturing PMI reports are spread out over three days this time with Asia Pacific Sunday night, Europe on Monday morning then the US and Canada on Tuesday morning. Economic News Economic reports released overnight and this morning include: Canada June Monthly GDP 3.1% vs street 3.0% Canada Q2 GDP annualized 3.1% vs street 2.7%, previous revised to 0.9% from 1.2% Canada industrial product prices (0.3%) vs street (0.2%) Canada raw material prices (1.4%) vs street (1.8%) US personal income 0.2% vs street 0.3% US personal spending (0.1%) vs street 0.2% US core PCE inflation 1.5% as expected Japan unemployment rate 3.8% vs street 3.7% Japan consumer prices 3.4% as expected Japan retail sales 0.5% vs street (0.2%) Japan industrial production (0.9%) vs street (0.1%) Japan vehicle production (1.7%) vs previous 6.6% Japan housing starts (14.1%) vs street (10.5%) Japan construction orders 24.4% vs previous 9.3% Eurozone unemployment rate 11.5% as expected Eurozone consumer prices 0.3% as expected Eurozone core CPI 0.9% vs street 0.8% UK house prices 11.0% vs street 10.2% Germany retail sales 0.7% vs street 1.5% Spain retail sales (0.5%) vs previous 0.2% Norway unemployment rate 2.9% as expected Norway retail sales (1.5%) vs street (0.3%) Italy unemployment rate 12.5% vs street 12.3% Italy consumer prices (0.2%) vs street (0.1%) Italy GDP (0.2%) vs street (0.3%) Greece retail sales 0.4% vs previous (8.5%) India GDP 5.7% vs street 5.5% Brazil GDP (0.9%) vs street (0.6%) NZ building permits 0.1% vs street 1.0% NZ activity outlook previous 45.1 NZ business confidence previous 39.7 NZ M3 money supply previous 5.4% Economic reports due later today include: 9:45 am EDT US Chicago PMI street 56.5 vs previous 52.6 9:55 am EDT US consumer confidence street 80.0
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