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News

Stocks rally on OPEC and FOMC speculation

Stock markets around the world have put on their rally caps to start the new trading week with miners and energy producers leading the charge. US index futures are up 0.4% while the FTSE and CAC are up 0.3% and the Dax is up 0.7%. 

Indications from the Bundesbank that the German economy has slowed in Q3 (likely thanks to Brexit)  and Chancellor Merkel's party getting hammered in regional elections‎ over the weekend has dragged on the Dax relative to its peers. 

Crude oil is bouncing back this morning with WTI us 1.4% and Brent up 1.2%. Speculation about what could come out of the upcoming side meeting between big producers at an upcoming conference in Algeria has picked up on reports that OPEC could call an emergency meeting to ratify any agreement reached at the informal meeting. Renewed fighting in Libya delaying an expected big ramp up in exports has also helped to boost prices, but this could reverse if hostilities ease again. 

Higher energy prices have boosted energy stocks which could help the SPTSX and oil sensitive currencies like CAD and NOK.

Speculation on what could happen at this week's FOMC and Bank of Japan meetings has also influenced trading today. USD is dropping back as speculation rising US inflation could force the Fed to raise rates fades.  This has helped gold to gain 0.3% and sparked a 1.7% rally in silver, helping mining stocks. 

I still think there's a 40% chance of a rate hike and a 60% chance the Fed will use the statement, press conference and projections to hint toward a December increase after the election. With the Republicans having recently accused the Fed of keeping rates low to help the Democrats, this decision could have an impact on the campaign regardless of what the Fed does.

 

Corporate News

There have been no major corporate announcements this morning. 


Economic News

UK Rightmove house prices        4.0% vs previous 4.1%

NZ service PMI                57.9 vs previous 54.2
NZ consumer confidence        57.9 vs street 54.2

 

Upcoming significant economic announcements include:

There are no major economic reports scheduled for North America today. 


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Disclaimer: CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.