Stock markets continue to climb this week with the positive momentum coming out of yesterday’s Asia Pacific trading carrying through trading in Europe and North America today. US indices steadily advanced through the day with traders shrugging off soft retail sales and a mixed Beige Book regional report, focusing on the better than expected earnings from JPMorgan as a sign that traders and others may have been overly pessimistic about the prospects for the upcoming earnings season.
Crude oil held steady through the day showing strong resilience in the face of a 6.2 mmbbl increase in DOE energy inventories. Coming a week after a 4.9 mmbbl drop in storage, the big weekly swings suggest that storage data may not be as reliable at the moment, so traders appears to be focusing on declining US production and anticipation of this weekend’s big meeting on a potential production freeze.
USD bounced back a bit today but the reaction of other currencies confirmed the action in indices showing that markets are moving back into risk on mode. The worst performers on the day were JPY, gold and CHF, while CAD, AUD and NZD declined less as capital continues to flow out of defensive plays and back into risk markets.
Today markets in Australia and New Zealand may be active around the NZ PMI and Australia employment reports. Employment in Canada, also a resource exporting country, grew by 40K jobs last month with the lower loonie helping other parts of the economy. It will be interesting to see if a lower AUD is having a similarly positive impact. The street is expecting a 17K increase for Australia after full time gains and part time losses offset each other last month.
Tomorrow’s Bank of England meeting is expected to be a non-event with Governor Carney expected to keep sitting on his hands and playing Mr. Dithers ahead of the Brexit referendum. US consumer prices could spark some Fed speculation trading but it would take a pretty big surprise to change expectations of no move in April at this point.
There have been no major announcements after the US close so far today.
Significant announcements released overnight include:
Canada interest rate 0.50% no change as expected
US retail sales (0.3%) vs street 0.1%
US retail ex auto 0.2% vs street 0.4%
US producer prices (0.1%) vs street 0.3%
US core PPI 1.0% vs street 1.3%
US DOE crude oil inventories 6.6 mmbbls vs street 1.0 mmbbls and previous (4.9 mmbbls)
US DOE gasoline inventories (4.2 mmbbls) vs street (1.5 mmbbls)
Upcoming significant economic announcements include:
(Note: 11:30 am in Sydney/Melbourne is currently 1:30 pm in Auckland, 4:30 pm in Vancouver, 7:30 pm in Toronto/Montréal, 12:30 am in London and 8:30 am in Singapore)
8:30 am AEST NZ BusinessNZ manufacturing PMI previous 56.0
11:30 am AEST Australia employment change street 17K
11:30 am AEST Australia full-time previous 16K
11:30 am AEST Australia part-time previous (16K)
11:30 am AEST Australia unemployment rate street 5.9%
10:00 am BST Eurozone consumer prices street (0.1%)
10:00 am BST Eurozone core CPI street 1.0%
12:00 pm BST Bank of England decision 0.50% and £375B no changes to interest rates or QE expected
8:30 am EST US consumer prices street 1.1%
8:30 am EST US core CPI street 2.3%
8:30 am EST US real average weekly earnings previous 0.6%
8:30 am EST US jobless claims street 270K
8:30 am EST Canada new house prices street 1.8%
9:00 am EST Canada Teranet/NB house prices previous 6.5%