Earlier today the IMF upgraded its 2014 global GDP growth forecast to 3.7% from 3.6%. Commodity traders took this as a positive for the resource demand outlook and boosted crude oil and gasoline prices. Natural gas also rallied on the news and received an extra boost from another deep freeze in consuming regions. The IMF news was also taken as an indication that world economy may finally be strong enough to grow without central bank support enabling many countries to start normalizing monetary policy. With continued QE tapering increasingly likely, USD rallied, sending gold, silver and other defensive plays like CHF and JPY lower. Selling/profit-taking against earnings reports also provided a headwind for shares today. The Dow also traded lower through most of the day following the report, falling by over 100 points at one time. Mounting evidence of an ongoing tapering program has sent the Generals into retreat, and the Dow to diverge negatively from the S&P, Dow Transports and NASDAQ. This puts more and more pressure on corporate earnings to come through strong and support current valuations. As the potential for more tapering becomes clearer, indices appear increasingly vulnerable. Resource-weighted Canadian stocks also gave back some of their recent gains, sending downward momentum into Asia Pacific share trading. Tonight and into tomorrow, currency markets still have the potential to be more active. NZD has been the top performing major over the last 24 hours following yesterday’s higher than expected inflation report that suggested the RBNZ may need to raise interest rates soon to combat rising inflation especially in housing. Today brings Australian inflation which may indicate if the RBA has room to lower rates if needed while could impact AUD trading. The Bank of Japan holds its monthly meeting today. It is widely expected to continue its aggressive QE program. Any comments on whether it may want to accelerate or maintain the current program could influence trading in JPY which has weakened with the Bank of Japan becoming increasingly lonely in the dovish camp. GBP has been the second best performer today after getting a boost from the IMF’s upgrade to its UK growth forecast. Tomorrow brings UK employment with traders looking to see how close the unemployment rate gets to the Bank of England’s 7.0% threshold for potential action. Minutes from the last central bank meeting may also give an indication of how the Bank is leaning. Tomorrow brings an interest rate decision from the Bank of Canada as well. Although the central bank is expected to stand pat once again, the accompanying statement could attract attention for any comments related to whether it is still thinking about cutting rates and any reaction to the falling Loonie. A small IMF growth upgrade helped to shore up the loonie near $1.1000 resistance for USDCAD and the pair could be active again on the news. Corporate News IBM $6.13 vs street $5.99, Revenue $27.7B short of street $28.2B 2014 expects to earn at least $18.00 in line then $20.00+ in 2015 CA Inc. $0.84 vs street $0.70, raised Mar year guidance to $3.05-$3.12 from $2.96-$3.03 Texas Instruments $0.49 vs street $0.46, guidance $0.36-$0.44 vs street $0.44 laying off 1,100 employees Economic News Significant announcements released overnight include: The IMF made a number of changes to its 2014 GDP growth forecasts including: US raised to 2.8% from 2.6% Canada raised to 2.2% from 2.1% UK raised to 2.4% from 1.8% (wow!) Germany raised to 1.6% from 1.4% France maintained at 0.9% Italy lowered to 0.6% from 0.7% Spain raised to 0.6% from 0.2% (wow!) Japan raised to 1.7% from 1.3% (wow!) China raised to 7.5% from 7.2% India raised to 5.4% from 5.2% Other announcements include: Germany ZEW current 41.2 vs street 35.0 and previous 32.4 Germany ZEW expectations 61.7 vs street 64.0 Hungary interest rate decision 0.15% cut to 2.85% more than the 0.10% cut that was expected Turkey interest rate decision 4.50% no change as expected Upcoming significant announcements include: 10:30 am AEDT Australia consumer confidence street 105.0 11:30 am AEDT Australia Q4 consumer prices 2.4% vs previous 2.2% TBA Bank of Japan Meeting 9:30 am GMT UK jobless claims street (32K) 9:30 am GMT UK unemployment rate street 7.3% 9:30 am GMT UK rolling 3 months employment street 256K 9:30 am GMT Bank of England minutes 10:00 am GMT Eurozone government debt 10:00 am EST Canada interest rate decision street 1.00% no change expected


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