Stocks and currencies have stabilized overnight with the market selloff having run its course and traders looking for the next move. US index futures plus the FTSE, Dax, Nikkei and the Hang Seng are all up or down marginally.
Currency markets have also been steady for the most part. Sterling is up boosted by an even bigger than expected rebound in UK retail sales. JPY and gold are holding on to recent gains. CAD is also up a bit today with crude oil up 0.75% this morning. The Canadian federal budget didn't have any impact on market sentiment toward the Loonie.
Today brings one of a series of potential turning points for the markets. The US House of Representatives is set to vote on President Trump's health care reform bill. This is the first big test of his economic plans in Congress and may indicate how smoothly or how difficult it may be to enact his tax reform and infrastructure plans.
The street has been banking big on reforms going smoothly so signs of opposition or delay could have a big impact on sentiment. It wouldn't take much to send traders jumping off the bandwagon at this point as we have seen over the last 48 hours. If the bill passes, it moves to the Senate next week where it could face even more opposition as the Republican majority is smaller there.
Meanwhile, the US Dollar also could be active around comments from Fed Chair Yellen. This is her first public appearance since last week's press conference. Traders will be looking to see if she will try to dial back the dovish reaction to the last Fed statement and dot plot which has sent the Dollar dropping and the Dollar Index under 100 over the last week.
Energy markets may be active today around the Natural Gas inventory report. Last week's big late winter storm is expected to cause a big 150+ BCF drawdown. Winter has been mild and demand lower overall, so this could become the gas bulls last stand.
There have been no major corporate announcements overnight or this morning.
Significant announcements released overnight include:
NZ RBNZ Official Cash Rate 1.75% no change as expected
UK retail sales 4.1% vs street 3.2% vs previous 2.6%
UK retail ex auto 3.7% vs street 2.6% vs previous 1.5%
UK CBI retail sales 9 vs street 4
UK CBI distributor sales 32 vs street 20
Upcoming significant economic announcements include:
8:30 am EDT US jobless claims street 240K
8:45 am EDT FOMC Yellen speaking
12:30 pm EDT   FOMC Kashkari speaking
10:00 am EDT US new home sales street 565K
10:30 am EST US natural gas street (149 BCF)
TBA US House of Representatives votes on health care reform bill
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