US stocks rally to kick off a big week, Japan in focus on data
US stocks bounced back Monday as some of the speculation surrounding a potential US rate hike in September eased back a bit. Personal income and spending numbers came in as expected but only because the previous month was revised upward setting a higher bar to beat. Fed Funds started the day pricing in a 42% chance of a September rate increase but this eased back during the day to 36%.
Easing rate hike speculation propelled US stocks higher to start the week but the Dow and S&P remained stuck short of recent double tops There’s a ton of data due later this week, including ADP and nonfarm payrolls plus manufacturing PMI, that traders may be reluctant to commit too much in one direction for now due to the risk of getting caught too far out on a limb.
Crude oil, which had been propelled higher last week by speculation that Iran could join conversations with the rest of OPEC and Russia toward a supplier agreement to stabilize the market, slumped back Monday. This could be due to a combination of no new news to keep the party going and oil no longer being the only game in town like it was last week with seems to have players cashing out of oil and moving on to other markets looking for action.
The spotlight in today’s Asia Pacific trading is likely to be on Japan where employment and retail sales reports are due. Over the weekend, dovish comments from Bank of Japan Governor Kuroda sent JPY lower and Japanese stocks higher on speculation the BoJ could increase monetary stimulus at its September meeting a week after the FOMC. Yesterday’s fall in the value of the Yen sparked a big rally for the Nikkei. Today’s data may give a better indication of how much pressure Japan’s central bank is under to do more to boost its economy.
There have been no major announcements after the US close today
Significant announcements released overnight include:
US personal income 0.4% as expected, previous revised up to 0.3% from 0.2%
US personal spending 0.3% as expected, previous revised up to 0.5% from 0.4%
US core PCE inflation 1.6% unchanged vs street 1.5%
US Dallas Fed (6.2) vs street (3.9) vs previous (1.3)
Upcoming significant economic announcements include:
(Note: 11:30 am in Sydney/Melbourne is currently 1:30 pm in Auckland, 4:30 pm in Vancouver, 7:30 pm in Toronto/Montréal, 12:30 am in London and 8:30 am in Singapore)
9:30 am AEST Japan unemployment rate street 3.1%
9:30 am AEST Japan household spending street (1.5%) vs previous (2.2%)
9:50 am AEST Japan retail sales street (0.9%) vs previous (1.4%)
11:30 am AEST Australia building approvals street (8.3%)
8:00 am BST Spain consumer prices street (0.3%)
9:00 am BST Italy retail sales street 0.1%
1:00 pm BST Germany consumer prices street 0.5%
8:30 am EDT Canada industrial prices street (0.3%) vs previous 0.6%
8:30 am EDT Canada raw material prices street (1.2%) vs previous 1.8%
10:00 am EDT US consumer confidence street 97.0
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