t has been another huge morning for market moving around the world, driving big market swings
and creating opportunities for trading across many major markets.
US markets have been active following a strong US retail sales report, the second 1% monthly gain in the last three months. Traders have taken this as a signal of another spring surge for the US boosting stocks. USD has swung in both directions in the last few minutes suggesting some indecision about what this means for the Fed’s interest rate liftoff plan.
In general, currency markets have been all over the place overnight with the divergences most apparent in AUD and NZD action. NZD has sold off dramatically after the RBNZ delivered a surprise interest rate cut, hinted more cuts could come and talked down the dollar again. On the flip side, AUD soared on the back of a strong Australian employment report that means the RBA is unlikely to cut rates again any time soon.
SEK has also been climbing today as surprise move back up to positive inflation has taken the pressure off the Riksbank to go even deeper into negative territory on interest rates.
CAD and NOK are mixed against USD today with the Loonie doing better while crude oil has started to drop back again on indications from the IEA that production growth is still outstripping demand growth and OPEC is keeping the pressure on the US in their supply war.
European indices are trading higher today with the Dax up 1.2% while treasury yields across the continent are falling once again. Suggestions that a deal on Greece could be reached next week have boosted spirits. While this could all reverse course again at any time, positive comments from the EU side and not just the Greek side has encouraged some optimism.
Asia Pacific indices were also higher overnight after economic numbers out of China and Australia came in better than expected.
There’s a lot for traders to chew on and digest this morning which could keep markets active. Tonight brings more data from New Zealand and Japan while tomorrow brings more inflation reports from Europe and the US.
There have been no major corporate announcements this morning.
Economic reports released overnight and this morning include:
RBNZ interest rate decision surprise 0.25% cut to 3.25%
South Korea interest rate 0.25% cut to 1.50% expected
US retail sales 1.2% as expected
US retail ex auto 1.0% vs street 0.8%
US jobless claims 279K vs street 275K
Canada new house prices 1.1% vs previous 1.2%
IEA global crude oil supply 96 mmbbl/d in May down 0.15 mmbbl/d over month but up 3.0 mmbbl/d over year, OPEC supply increased with record production from Saudi Arabia, Iraq and UAE. Revised demand forecast up by 1.5 mmbbl/d.
World Bank 2015 GDP growth forecasts
World cut to 2,8% from 3.0%
US cut to 2.7% from 3.2%
China retail sales 10.1% as expected
China industrial production 6 1% vs street 6.0%
China Bloomberg monthly GDP 6.55% vs previous 6.4%
Australia employment change 42K vs street 15K
Australia full-time jobs 15K vs previous (22K)
Australia part-time jobs 27K vs previous 19K
Australia unemployment rate 6.0% vs street 6.2%
France consumer prices 0.3% as expected
Sweden consumer prices 0.1% vs street (0.1%)
Greece Q1 unemployment rate 26.6% vs street 25.4%
Upcoming significant announcements include:
10:30 am EDT US natural gas storage street 113 BCF
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