World stock markets have been trading moderately higher overnight clawing back some of Mondays losses. US index futures are up 0.3% while the FTSE is up 0.5%, the Dax is up 0.7% and Italy's FTSEMIB is up 1.7%.

The reaction to overnight news reports has varied from tepid to cautiously optimistic. Italy's rally has been sparked by the ‎arrival of new PM Gentiloni who is keeping the same finance minister indicating continuity.  Chinese stocks were flat although positive China retail sales and industrial production reports have boosted copper to a 0.3% gain.

Crude oil continues to climb with WTI up 0.7% and Brent up 0.9%. The International Energy Agency indicated it expects ‎the oil market to shift from surplus to deficit in the first half of 2017 if OPEC and non-OPEC producing countries to stick to their agreements.

Currency markets are steady today with US Dollar traders on pins and needles ahead of tomorrow's Fed interest decision and monetary policy outlook. A rate hike this week looks like a done deal. Traders may look to the dot plot, statement, economic projections and press conference. The US dollar rally has priced in a more aggressive campaign of 2017 interest rate increases leaving it vulnerable if the Fed is not as hawkish as the street.

Corporate News

There have been no major corporate announcements this morning.

 

Economic News

China industrial production                      6.2% vs street 6.1%

China retail sales                                   10.8% vs street 10.2%

 

UK consumer prices                              1.2% vs street 1.1% vs previous 0.9%

UK core CPI                                          1.4% vs street 1.3%

UK retail prices                                      2.2% vs street 2.1%

UK producer input prices                       12.9% vs street 13.5%

UK producer output prices                     2.3% vs  street 2 5%

UK house prices                                    6.9% vs street 7.3%

 

Germany ZEW current situation              63.5 vs street 59.0

Germany ZEW expectations                   13.8 vs street 14.0

Germany consumer prices                     0.8% as expected

 

Australia house price index                    3.5% vs street 4.6%

Upcoming significant economic announcements include:

8:30 am EST                 US import prices                                   street (0.4%)

 

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