Hawkish comments from central bankers continue to impact global trading in stocks and forex. Increasing signs that the liquidity party of easy money finding its way into the stock market is ending has traders taking money off the table.
Comments from Fed Chair Yellen about continuing gradual normalization, the IMF cutting its US growth forecast and indications the Senate health care reform vote may need to be pushed off to mid-July haven't helped US sentiment either. Dow, SPX futures and the FTSE are flat. NASDAQ futures are down 0.3% as technology stocks continue their retreat while the Dax is down 0.5% as the Euro keep climbing.
The street has taken ECB President Draghi's comments about looking past current soft inflation as a sign the central bank is starting to look toward cutting back on stimulus. The Euro is the top performer for a second straight day with the street anticipating a hawkish turn.
CAD is also particularly strong today with the Bank of Canada also openly talking about cutting back on stimulus. In an interview, Governor Poloz indicated the 2015 emergency rate cuts have done their job, that excess capacity is being used steadily and reminded the street that an interest rate decision is coming up, all of which the street have taken as a hawkish hint.
Today ECB President Draghi, along with Bank of England Governor Carney and Bank of Canada Governor Poloz are participating in a panel discussion. This could spark trading activity across all three currencies as it gives traders a chance to contrast and compare their stances on monetary policy.
Crude oil has gone on a roller coaster ride over the last 24 hours and may remain active today. US API crude inventories rose 0.85 mmbbls last week, dumping a bucket of cold water on yesterday's big rebound. On the other hand, overnight reports that Russian production has been falling since last autumn cushioned the blow. DOE inventories are due mid-morning with the street expecting a 2.0 mmbbl drawdown.
There have been no major corporate announcements this morning.
Significant announcements released overnight include:
US API crude oil inventories 0.85 mmbbls
UK Nationwide house prices 3.1% vs street 1.9%
Upcoming significant economic announcements include:
8:30 am EDT US advance goods trade balance street ($66.0B)
9:30 am EDT BoC Poloz, BoE Carney, ECB Draghi panel discussion
10:00 am EDT US pending home sales street 0.5%
10:30 am EDT US DOE crude oil inventories street (2.25 mmbbls)
10:30 am EDT US DOE gasoline inventories street 0 mmbbls
10:30 am EDT US DOE distillate inventories street 0.9 mmbbls
2:15 pm EDT Bank of Canada Deputy Governor Patterson speaking
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