The return of capital from defensive havens to risk markets has accelerated overnight after North Korea backed away from their threat to attack Guam.

Precious metals and the Japanese yen are selling off on the news, with silver down 1.5% and gold down 0.8%. USD/JPY however has popped back up over 110.00. Stocks are also climbing, led by a 1.1% gain for the Nikkei, which got some help from stronger than expected Japanese industrial production. The FTSE and Dax are up 0.4%, while US index futures are up 0.2%. 

‎It's also a big day for trading in sterling, which has been slammed downward following the release of weaker than expected inflation numbers. Steady or falling inflation undermines the hawkish case and makes it less likely Bank of England governor Mark Carney will raise interest rates any time soon. GBP is down sharply against both USD and EUR today.

There is more going on in North America today as well. Home Depot beat the street on earnings and issued positive guidance. This news, along with strong earnings from Canadian Tire last week, suggests that the Amazon challenge killing mall-based retailers may not be having as big an impact on big box stores. It also suggests a positive environment for home ‎improvement retailing. On the other hand, Coach beat the street by a penny but guided below expectations. 

These results set the stage for today's US retail sales report, which may give an indication of consumer spending trends. With July auto sales having already been reported as really weak, the headline versus ex auto split could be significant.

In Canada today, existing home sales may give a better idea on how much the Toronto housing market has slowed of late. The start to NAFTA talks tomorrow may impact trading in the Loonie and selected stocks. Yesterday, forest stocks sold off with softwood lumber likely to be a key point of contention (again). Any pronouncements or tweets from President Trump or other top US officials could have a significant influence on sentiment.

Corporate news

Home Depot $2.25 vs street $2.21, sales $28.1B above street  $27.8B, guides full year sales $99.6B above street $99.3B, raises same store sales guidance to 5.5% from 4.6% above street 5.0%

Coach $0.50 vs street $0.49, guides full year $2.35-$2.40 below street $2.40, guides sales $5.8-$5.9B above street $5.0B

Metro $0.78 vs street $0.79

Economic news

Significant announcements released overnight include:

Germany GDP 2.1% vs street 1.9%

UK consumer prices 2.6% vs street 2.7%
UK core CPI 2.4% vs street 2.5%
UK retail prices 3.6% vs street 3.5%
UK producer input prices 6.5% vs street 6.9% vs previous 9.9%
UK producer output prices 3.2% vs street 3.1%
UK house prices 4.9% vs street 4.3% vs previous 4.7%

Japan industrial production 5.5% vs previous 4.9%

Upcoming significant economic announcements include:

8.30am EDT US retail sales street 0.4%
8.30am EDT US retail ex auto street 0.3%
8.30am EDT US Empire manufacturing street 10.0

9am EDT Canada existing home sales previous (6.7%)


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