It has been a sluggish start to the week for stocks around the world. US index futures and the Nikkei are down slightly while the FTSE is down 0.3%.
The main economic news overnight has been service PMI reports which were better-than-expected for China and Japan but softer-than-expected in the UK. The Dax and a number of continental markets are closed for a holiday.
In currency markets, the spotlight is on sterling with the UK election on Thursday. Campaigning resumes today after being suspended following the tragic terrorist attack on London Saturday night. GBP is up today after four polls came out Sunday giving the Conservatives leads of 12, 11, 4 and 1 percentage points (7 point lead on average).
Gold is hanging on to Friday's gains while the Yen has dropped back a bit and CAD is up slightly. USD is mixed as traders continue to react to last Friday's nonfarm payrolls report. Fed speculation continues with US non-manufacturing PMI out today. Last week's FOMC member comments pointed to a June hike but things look more uncertain after that.
Crude oil remains under pressure despite reports that Egypt, Saudi Arabia and other allies have moved to isolate Qatar over its relationship with Iran. Trading action suggests that so far markets see this as more of a diplomatic tiff so far that likely won’t impact a global energy market that currently is well supplied.
There have been no major corporate announcements this morning.
Significant announcements released overnight include:
UK service PMI 53.8 vs street 55.0
Germany service PMI 55.4 vs street 55.2
China Caixin service PMI 52.8 vs previous 51.5
Japan service PMI 53.0 vs previous 52.2
Australia Melbourne Institute inflation 2.8% vs previous 2.6%
Upcoming significant economic announcements include:
9:45 am EDT US Markit service PMI street 54.0
10:00 am EDT US ISM non-manufacturing PMI street 57.1
10:00 am EDT US factory orders street 0.2%
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