Stock markets overseas have been rallying overnight with strong moves up off of technical support levels, with the August lows holding to confirm a double bottom for the Dax, a triple bottom for the Hang Seng and a bear trap reversal for the Nikkei. This rebound has clearly been technically driven as there’s been a lot of news out and most of it has come in near or slightly below expectations. Also encouraging is that Chinese markets rallied into holiday weekend closures, a sign of improving confidence, which has helped copper to bounce up out of a double bottom and . The failure of markets to continue sliding on soft news provides more evidence to suggest that the common late summer seasonal selloff has nearly run its course. US indices, however, remain vulnerable. Having been the last to start falling and with the Dow and NASDAQ still well above their August lows, retests remain possible over the next couple of weeks as they could be the last to bottom too. The S&P has held its August closing lows but remains above its intraday lows. Stronger than expected ADP payrolls have provided US indices and USD with another boost this morning. I have been indicating lately that unless things really go off the rails this month, the Fed may need to raise interest rates in October due to growing political uncertainty around December. This result keeps the Fed on track toward liftoff. In currency markets today’ we're seeing a rotation away from defensive havens like gold (despite reports of higher Chinese buying this year) and JPY, and also from continental currencies like EUR. Resource currencies are also split with AUD and NZD charging ahead, while SEK and NOK trail behind. CAD has been running into the middle of the pack with the positive impact of stronger than expected Canada GDP offset by USD gains. Canada’s GDP rose for a second straight month in July, confirming the streak of five losing months between January and May has ended with the economy rebalancing. This confirms no pressing need for a October rate cut around the federal election and keeps the case for December questionable. Corporate News Costco $1.73 vs street $1.66 Economic News Significant announcements released overnight include: US ADP Payrolls 200K vs street 190K US ADP Payrolls prev month 186K revised down from 190K Canada July GDP 0.3% over month vs street 0.2% 0.8% over year vs street 0.7% UK Q2 GDP update 2.4% vs street 2.6% and previous 2.9% Germany retail sales 2.5% vs street 3.3% Germany unemployment chnge 2K vs street (5K) Germany unemployment rate 6.4% as expected Italy unemployment rate 11.9% vs street 12.0% Eurozone unemployment rate 11.0% vs street 10.9% Eurozone consumer prices (0.1%) vs street 0.0% Greece retail sales (7.3%) vs street (5.7%) Japan industrial production/mo (0.5%) vs street 1.0% Japan retail sales 0.8% vs street 1.2% Japan housing starts 8.8% vs street 7.6% Japan construction orders (15.6%) vs previous (4.0%) NZ building permits (4.9%) vs previous 20.4% NZ ANZ activity outlook 16.7 vs previous 12.2 NZ ANZ business confidence (18.9) vs previous (29.1) Australia building approvals (6.9%) vs street (2.0%) Upcoming significant announcements include: 9:45 am EDT US Chicago PMI street 53.0 10:30 am EDT US DOE crude oil inventories street (0.35 mmbbls) CMC Markets is an execution only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.