Stock markets around the world have been playing catch up overnight, with the positive response to Friday’s nonfarm payrolls carrying through overseas markets and coming back around to continued gains in north America. Asia Pacific markets were flat with China closed for a holiday. European indices are climbing this morning with the FTSE up 0.5% and the Dax up 1.0%. US index futures for the Dow and S&P are up about 0.2% in early morning trading.
The street continues to view Friday’s nonfarm payrolls growth of 215K and manufacturing PMI climbing from 49.5 back into expansion territory near 51.8 as goldilocks reports. In other words, reports that show the US economy growing not too strong which could force the Fed to raise interest rates sooner, and not too weak which would raise questions about corporate earnings prospects.
Meanwhile, crude oil is stabilizing today with WTI steady near $36.50 and Brent steady near $38.50. Natural gas is trading higher following a cold weekend and snow in some consuming regions shows winter still dragging on but with heating oil not confirming, the advance could fade as the late snows melt.
Currency trading today finds USD trading up slightly. The biggest action overnight has been in AUD which has been falling after Australia retail sales came in soft and ahead of tonight’s RBA meeting. While the central bank is expected to stay the course on interest rates, it could launch another round of verbal attacks against the dollar, which despite overnight weakness, had posted significant gains over the last month. Other resource currencies like CAD, NZD and RUB have also been looking a bit tired lately. Among resource currencies, AUD may be more active to start the week but over the next few days the focus may shift to CAD with Ivey PMI and Canada employment due later in the week.
There have been no major corporate announcements in North America today
Significant announcements released overnight include:
UK construction PMI 54.2 vs street 54.1
Eurozone producer prices (4.2%) vs street (4.0%)
Eurozone unemployment rate 10.3% as expected
Spain unemployment change (58K) vs street (50K)
Australia building approvals (9.0%) vs street (9.1%)
Australia retail sales 0.0% vs street 0.4%
India Nikkei manufact PMI 52.4 vs previous 51.1
Upcoming significant announcements include:
9:45 am EDT US ISM New York street 54.1
10:00 am EDT US factory orders street (1.8%)
10:00 am EDT Canada Bloomberg Nanos conf previous 54.5