Stock markets around the world have been trading slightly lower overnight pausing to digest Monday's gain that saw the Dow, S&P, and NASDAQ all close at all-time highs. US index futures are down 0.1% with the FTSE down +0.3% and the Dax down 0.6.
A number of forces may tug at stocks today including an increase to Home Depot's 2016 earnings guidance, more reports improved trading links between Hong Kong and Shenzen may come soon, and mixed German ZEW investor survey results.
Inflation is also having a big impact on trading today. UK inflation reports came in higher than expected pretty much across the board (consumer, retail, producer and especially housing). This jump is likely related to the big post-Brexit vote plunge in the pound.
USD is weakening today following comments from SF Fed President Williams who suggested the Fed should rethink its priorities in a low interest rate environment, shift its focus away from keeping a lid on inflation. A rethink at the Fed would make a rate hike this year less likely, dragging on the greenback.
Gold and precious metals plus commodities like crude oil are trading higher today on the weaker USD particularly silver and platinum. Currencies are also rallying, particularly CAD, EUR and JPY with USDJPY dipping under the 100.00 round number. Fed speculation and USD related trading may remain active through today's US consumer price report.
Home Depot $1.97 as expected, sales $26.5B as expected, US same store sales up 5.4%, raises 2016 EPS guidance to $6.31 from $6.27
UK consumer prices 0.6% vs street 0.5%
UK core CPI 1.3% vs street 1.4%
UK retail prices 1.9% vs street 1.7%
UK producer input prices 4.3% vs street 2.0%
UK producer output prices 0.3% vs street 0.0%
UK house prices 8.7% vs previous 8.1%
Germany ZEW current situation 57.6 vs street 50.2 vs previous 49.8
Germany ZEW expectations 0.5 vs street 2.0 vs previous (6.8)
Upcoming significant economic announcements include:
8:30 am EDT Canada manufacturing sales street 0.5%
8:30 am EDT US consumer prices street 0.9%
8:30 am EDT US core CPI street 2.3%
8:30 am EDT US real average weekly earnings previous 1.2%
9:15 am EDT US industrial production street 0.3% vs previous 0.6%
9:15 am EDT US manufacturing production street 0.3%
12:30 pm EDT FOMC Lockhart speaking
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