It’s been a while since commodities have had such a banner day that they have stolen the spotlight away from stocks and currencies. A number of commodity markets moved higher on a day that USD was flat, meaning they have been boosted by their own fundamentals rather than currency effects. Grains have led the charge, with corn, wheat and soybeans all rising on higher US export demand. Crude oil both Brent and WTI posted over 1% gains as Venezuela indicated it plans to push for production cuts at next week’s OPEC meeting. Gold and silver also posted moderate gains. It wasn’t all roses though as Arabica coffee was slammed for a 5% loss on positive crop forecasts in South America. The rally in commodities has also had a positive effect on resource currencies today. The oil sensitive CAD, NOK and RUB along with the gold sensitive ZAR have been among the top performers today. AUD and NZD have not partaken in this party, however, likely because China, their main export customer, continues to struggle economically. Stocks are coming off of a mixed day. European stocks fell after flash PMI results confirmed that the continental economy continues to struggle. Better than expected UK retail sales helped GBP a bit and kept the FTSE from falling more than it did. US indices traded lower through much of the day but did manage to advance into the close, to send some positive momentum into today’s Asia Pacific trading. The Russell 2000 was the top performing US index, a positive sign for breadth. Considering the positive Philly Fed, leading index and existing home sales results, the gains were not as strong as they could have been suggesting that the US stock advance may be nearing exhaustion with a lot of positive news and high expectations already priced in. Corporate News Gap $0.80 vs guidance $0.79, cuts FY guidance to $2.73-$2.78 from $2.90-$2.95 Economic News Significant announcements released overnight include: US Philadelphia Fed 40.8 (wow!) vs street 18.5 US consumer prices 1.7% vs street 1.6% US CPI ex food and energy 1.8% vs street 1.7% US jobless claims 287K vs street 284K US flash manufacturing PMI 54.7 vs street 56.3 US existing home sales 5.26M vs street 5.15M US leading index 0.9% vs street 0.6% US natural gas (17 BCF) vs street (13 BCF) France flash manufacturing PMI 47.6 vs street 48.8 France flash service PMI 48.8 vs street 48.5 Germany flash manufacturing PMI 50.0 vs street 51.5 Germany flash service PMI 52.1 vs street 54.5 Eurozone flash manufacturing PMI 50.4 vs street 50.8 Eurozone flash service PMI 51.3 vs street 52.4 UK retail sales 4.3% vs street 3.8% UK retail ex auto 4.6% vs street 4.2% Upcoming significant announcements include: 8:30 am EDT Canada consumer prices street 2.1% 8:30 am EDT Canada core CPI street 2.1%
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