World markets have been trading mixed overnight after Moody's downgraded China for the first time since 1989 over debt concerns. Copper fell 0.7% on the news while Chinese indices were steady.
US index futures are flat this morning. Continental indices like the Dax are down marginally. UK markets are mixed with Cable trading just below $1.3000 and the FTSE trading just above 7,500. Overnight the UK raised its security threat level to Critical following the tragic terrorist attack on Manchester.
Crude oil is holding on to recent gains with WTI near $51.50 after API reported a 1.5 mmbbl drawdown of US crude oil inventories. CAD continues to benefit from this with the Loonie continuing to climb and outperforming other majors. CAD pairs and WTI crude oil may remain active for trading today.
The Bank of Canada's latest decision and statement are due at 1000 am EDT today. Interest rates are expected to remain steady, but the statement could attract particular attention. Earlier this year, Governor Poloz has opened the door to a rate cut if US trade policy changes impact the Canadian economy. This had gone quiet but since the last BoC meeting the US has been sabre rattling on dairy, softwood lumber and aerospace while putting a NAFTA renegotiation into motion. Trade uncertainty also means that even though the Canadian economy has been doing well lately, a rate hike looks unlikely.
Dovish talk from the central bank could send the Loonie lower, but if he holds off on dovishness, the depressed dollar could bounce back. At 1030 EDT, DOE inventories are due as well. Canadian bank earnings also start today. Bank of Montreal has kicked things off with mixed report, beating the street on revenues and raising its dividend, offset be EPS coming in a penny short.
This afternoon, focus turns to the US Dollar and FOMC minutes. Political turmoil and soft economic data have knocked the Dollar down lately, overshadowing President Trump’s overseas trip and the White House’s budget request . Expectations of a June rate hike have come down even though FOMC members have been talking about staying the course. The June decision will indicate if the Fed is still serious about hitting its target of three hikes this year with September looking impossible for a hike with a budget war looming.
Bank of Montreal $1.92 vs street $1.93, sales $5.7B vs street $5.1B, 2% dividend increase
Tiffany & Co. $0.74 vs street $0.70, sales $899M vas street $914M
Significant announcements released overnight include:
NZ trade balance $578M vs street $267M
Upcoming significant economic announcements include:
8:45 am EDT ECB Draghi speaking
10:00 am EDT Bank of Canada interest rate 0.50% no change expected
10:00 am EDT   US existing home sales street 5.65M
10:30 am EDT US DOE crude oil inventories street (2.0 mmbbls)
10:30 am EDT US DOE gasoline inventories street (1.0 mmbbls)
10:30 am EDT US DOE distillate inventories street (0.5 mmbbls)
2:00 pm EDT FOMC meeting minutes
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