Overnight trading continues to reflect an end to the recent bout of complacency and recognition of growing political risk. Gold and the Yen are consolidating yesterday's breakout rallies, while the Nikkei fell 1.0% as capital continued to exit stocks.
This morning finds US index futures, the FTSE, Dax, and major currencies including gold all trading flat. The war of words between the US and North Korea ramped up overnight amid more threats from both sides, while China called for a peaceful resolution. Meanwhile, Secretary of State Tillerson is in Moscow today for talks with Russia with Syria likely high on the agenda.
Crude oil continued to advance overnight, rising another 0.6%. Traders have responded positively to Tuesday's API inventory report which showed a 1.3 mmbbl decline in US stockpiles. This provides more evidence that the big build phase is over and the US market is starting to tighten up again. Crude oil and gasoline may remain active through today's DOE reports.
Rising oil prices and strong employment gains suggest that the Bank of Canada is unlikely to cut interest rates today. Another hold decision is widely expected. Although it look like Canada is not in President Trump's sights over trade, until NAFTA renegotiations are settled and the issue of a border tax is resolved, Governor Poloz may keep the option of an emergency rate cut if needed in his back pocket.
Blackberry could attract renewed interest today after the company was awarded nearly $815 million in arbitration from a dispute with Qualcomm.
Blackberry won $815 million from Qualcomm in arbitration over a royalty dispute
Significant announcements released overnight include:
US API crude oil inventories (1.3 mmbbls)
UK jobless claims 25K vs previous (11K)
UK 3M employment change 39K vs street 70K vs previous 92K
UK unemployment rate 4.7% as expected
UK average weekly earnings 2.3% vs street 2.2%
Upcoming significant economic announcements include:
8:30 am EDT Canada Teranet house prices previous 13.4%
10:00 am EDT Bank of Canada interest rate 0.50% no change expected
10:00 am EDT Bank of Canada monetary policy report
11:15 am EDT Bank of Canada Poloz press conference
10:30 am EDT US DOE crude oil inventories street (1.5 mmbbls)
10:30 am EDT US DOE gasoline inventories street (1.0 mmbbls)
10:30 am EDT US DOE distillate inventories street (1.0 mmbbls)
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