Stock markets around the world continue their move into April in a slump. US index futures are down 0.2% while the Nikkei fell 0.9%. The Dax is flat while the FTSE is the only major market in the green, rising 0.3%. Yesterday’s mixed manufacturing PMI and soft sales for traditional automakers have been dragging on sentiment to start the month.
Energy and metal prices are on the rebound today with WTI crude oil up 0.35% and holding $50, copper up 0.25%, gold up 0.5% and Silver up 1.0%. Despite this tailwind, resource currencies are struggling with USDCAD back above $1.3400 and NZDUSD back under $0.7000.
Considering the resource countries like Canada and Norway were among the league leaders in manufacturing PMI, resource country weakness seems odd. With the Japanese Yen up today as well, it seems to me that we're seeing profit-taking in risk markets between major developments and some of that money is wandering back in to defensive havens.
Today the spotlight for news is on trade and manufacturing. Trade balances for the US and Canada are at 830 am EDT which could attract more attention than usual in the current political climate with President Trump looking to renegotiate NAFTA. Australia’s trade surplus jumped to $3.5B in February from $1.5B a month earlier which could bode well for Canada also a big resource exporter.
US factory orders and a durables update may also attract attention. Tomorrow brings service PMI reports and ADP Payrolls. The health care sector could be active if reports of a new Obamacare reform proposal come to fruition.
There have been no major corporate announcements this morning.
Significant announcements released overnight include:
Australia trade balance $3.5B vs street $1.9B
Australia RBA interest rate 1.50% no change as expected
Spain unemployment (48K)street (41K)
UK construction PMI 52.2 vs street 52.5
Eurozone retail sales 1.8% vs street 1.0%
Upcoming significant economic announcements include:
8:30 am EDT Canada trade balance street 0.55B
8:30 am EDT US trade balance street ($44.5B)
10:00 am EDT US factory orders street 1.0%
4:30 pm EDT FOMC Tarullo speaking
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