Gold gains while traders wait for next shoe to drop
Asia Pacific markets provided a strong start to the week with a catch up rally. The Hang Seng rose 0.9% while the Nikkei gained 0.4%. Initial enthusiasm has faded as the day has progressed. European markets are mixed with the FTSE up 0.2% and the Dax down 0.4% while US index futures are flat.
As is normal after nonfarm payrolls, US news flow goes quiet for a few days. There are still some earnings reports of interest. Toymaker Hasbro has posted stellar earnings this morning and a 10%+ dividend increase.
There are a number of things simmering away in the background that could move the markets but it's hard to say how much or when at this point. For example, Sterling is steady sitting on $1.2500 as three days of debate on the Brexit bill gets underway in the UK House of Commons. In Europe, Germany is blaming the ECB for the low Euro following verbal barbs from President Trump last week with ECB President Draghi speaking today. Polls in France and Germany showing opposition parties gaining ground and an IMF report on Greece's debt may also attract some attention.
Tensions between the US and Iran remain elevated following Iran's recent missile test. WTI crude is up 0.2% while gold is up 0.5%.
So there's potential for action, but it's not clear where the main focus may fall. There are also a number of round number tests to keep an eye on including 20,000 for the Dow, $1.3000 for USDCAD, par for USDCHF, $1.2500 for GBPUSD and others.
Hasbro $1.64 vs street $1.27 (wow!) 11.8% dividend increase
Tyson Foods $1.59 vs street $1.27, raises Sept year guidance to $4.90-$5.05 from $4.70-$4.85
Germany factory orders 8.1% vs street 4.2%
Norway industrial production (1.4%) vs previous 1.3%
China Caixin service PMI 53.1 vs previous 53.4
Australia retail sales (0.1%) vs street 0.3%
Australia Melbourne inflation 2.1% vs previous 1.8%
Japan real cash earnings (0.4%) vs street (0.2%)
Upcoming significant economic announcements include:
9:00 am EST ECB Draghi speaking
4:30 pm EST FOMC Harker speaking