August is off to a big start this morning with the FTSE and Hang Seng up 0.8%, the Dax and US index futures are up 0.5%, while the Nikkei is up 0.3%.
There are two main factors attracting attention from traders today. Earnings reports have resumed, led by a strong report from BP that has energy stocks and the FTSE outperforming even with Brent down slightly. Reports from North America have also been positive so far with WestJet, Thomson Reuters, Phillips 66 and Xerox beating the street by wide margins Another flurry of reports is due after the US close today, led by Apple.
Manufacturing reports have been generally positive. China and the UK came in well above expectations while India did particularly poorly. Resource exporters Australia and Norway both beat expectations and delivered strong numbers, which could bode well for Canada. Reports for the US and Canada are due mid-morning with traders looking to see if the big drop in Chicago was regional or a sign of trouble for the broader national economy. USD personal income, core PCE inflation and construction spending are also due today. Energy markets may remain active with API oil inventories out late afternoon.
In currencies today, USD has bounced back a bit against EUR and JPY. AUD and NZD slipped back under $0.8000 and $0.7500 respectively. The RBA held its benchmark interest rate at 1.50%. Governor Lowe tried to talk down the Aussie Dollar a bit indicating a higher currency may depress inflation and keep interest rates down. This stands in contrast to Canada where a strong economy and expectations of another rate hike have kept a tailwind behind the loonie.
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