Stock markets have been steady overnight with US index futures down slightly while the FTSE
and Dax are up slightly. The biggest move was in the Hang Seng which staged a 1.1% catch up rally after underperforming last week.
This action feels like the calm before the storm with several major political, economic and monetary developments on the way this week.
The spotlight in currency trading today is on the UK with the Brexit bill back in the House of Commons where MPs are expected to vote on whether to accept or reject the two House of Lords amendments. PM May could be set to trigger Article 50 as soon as today and if not, likely one day this week, while SNP leader Sturgeon is expected to deliver another call for a second Scottish independence referendum.
The US Dollar is slipping back again today even though Friday's strong payroll and wage gains added to the case for multiple rate hikes this year starting this week. The US Dollar has been pricing in four hikes for several months now, and it appears some traders are taking profits against the news.
CAD, meanwhile, is gaining ground on USD despite a 0.8% that usually would send the loonie lower. This indicates that the currency continue to benefit from Friday's very strong Canadian employment report that showed a 100K gain in full-time jobs.
Gold and JPY are also starting to regain their footing but they also could be benefiting from increasing political risks. A diplomatic incident between the Netherlands and Turkey over the weekend has the potential to give a second wind to Wilders’ euroskeptic Freedom Party (PVV) who had been falling in the polls. Wednesday's Dutch election has the potential to impact trading in the Euro through the week.
There have been no major corporate announcements so far this morning.
Italy industrial production (0.5%) vs street 3.2%
Japan producer prices 1.0% as expected vs previous 0.5%
Upcoming significant economic announcements include:
9:30 am EDT ECB Draghi speaking
There are no major releases scheduled for North America today.
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