rude oil is coming off another big day. Brent and WTI dropped back in the morning as traders took some trading profits as Canadian Oil Sands operations started toward a return to production, but that was short-lived as oil markets regained their footing and started to power ahead again in the afternoon. Energy sensitive currencies like CAD and NOK rallied in tandem with oil prices. Brent Crude completed a golden cross confirming the one completed in WTI earlier in the week to indicate the recovery trend continues.
Action in North American stock markets was mixed with indices falling in the morning and recovering in the afternoon. Utilities and Telecom were the top performing sectors suggesting defensive positioning but this was not confirmed by bigger defensive plays like gold and JPY which retreated on the day. Retailers were mixed with Kohl’s plunging 9.7% in the US on a weak earnings report while Canadian Tire rallied 3.7% on a positive report. These results suggest that the retail environment may be stronger in Canada at the moment. Nordstrom may give another indication of which way the sector is heading. Gold producers fell in Canada while base metal miners came under pressure in the US suggesting that miners in Australia could struggle today.
Heading into the weekend, there are a number of economic announcements still due that could move the markets, Retail sales may be a particular focus with reports due for New Zealand, Singapore and later the United States. The US report may attract particular attention in the wake of disappointing earnings reports from US retailers as traders try to get a read on how strong the US economy. Boston Fed President Rosengren indicated again today he thinks the street has been too pessimistic about the US economy and underpricing the potential for rate hikes this year saying the odds of a hike are higher than the street currently thinks. In Europe, Germany headlines a flurry of GDP reports.
There have been no major announcements after the US close so far.
Significant announcements released overnight include:
Bank of England interest rate and QE 0.50% and £375B no change as expected, 9-0 votes as expected
Bank of England forecasts
2016 GDP cut to 2.0% from 2.2%
Q2 GDP cut to 0.3% from 0.5%
2016 inflation maintained at 0.4% expected to rise to 2.1% in two years
Norway interest rate 0.50% no change as expected
US import prices (5.7%) vs street (5.4%) vs previous (6.2%)
US jobless claims 294K vs street 270K
US natural gas 56 BCF vs street 58 BCF
Canada new house prices 2.0% vs street 1.9%
Germany wholesale prices (2.7%) vs street (2.6%)
Sweden unemployment rate 3.8% as expected vs previous 4.0%
France consumer prices (0.2%) as expected
Sweden consumer prices 0.8% vs street 0.9%
Norway GDP 1.0% vs street 0.1%
Norway mainland GDP 0.3% vs street 0.2%
Eurozone industrial production 0 2% vs street 0.9%
Greece unemployment rate 24.2% vs street 24.3%
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)
8:45 am AEST NZ Q1 retail sales street 1.0% vs previous 1.2%
3:00 pm AEST Singapore retail sales street 3.6% vs previous (3.2%)
3:00 pm AEST Singapore retail ex auto street (3.9%) vs previous (9.6%)
7:00 am BST Germany consumer prices street (0.1%)
7:00 am BST Germany GDP street 1.2% vs previous 2.1%
8:00 am BST Spain consumer prices street (1.1%)
9:00 am BST Italy GDP street 0.9%
9:30 am BST UK construction output street (2.7%)
10:00 am BST Greece GDP street (1.4%)
10:00 am BST Eurozone GDP street 1.6%
8:30 am EDT US retail sales street 0.8% vs previous (0.4%)
8:30 am EDT US retail sales ex auto street 0.5%
8:30 am EDT US producer prices street 0.2%
8:30 am EDT US core PPI street 0.9%
10:00 am EDT US consumer sentiment street 89.5
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