Oil and USD rebound as focus turns back to economic news with a lot of numbers on the way
US indices finished up moderately in US trading on a relatively quiet day for news on the political front, but there was a lot of action in other markets. Crude oil rallied with WTI regaining the $50.00 level on indications that OPEC is preparing to extend production cuts. This helped to propel energy stocks and energy currencies higher for the most part.
Meanwhile, GBP outperformed EUR by a wide margin indicating that despite chatter out of Europe, traders think Brexit is likely to be more beneficial for the UK than the EU heading into tomorrow’s expected initial EU response to yesterday’s triggering of Article 50.
AUD, JPY and NZD struggled as the US Dollar bounced back with another round of Fed speakers indicating 2-3 more rate hikes are likely this year.
It was a rough day for a number of Canadian stocks. CIBC fell 2.8% after raising its big for US based PrivateBancorp by 20% to $4.9B raising concerns it could be chasing an already highly priced stock and could be overpaying. Takeover risk also dragged on Cenovus, sending its shares down 13.7% after it agreed to acquire oil sands and natural gas assets from ConocoPhillips for $17.7B. Lululemon was slammed for a 23.4% loss on disappointing guidance.
Trading for the last couple of weeks has been dominated by political and central bank developments. Today is not only the last day of the month and the quarter, it is also the fiscal year end data for a lot of financial companies and kicks off a week of big days for economic data running through to next Friday’s US nonfarm payrolls report.
Today could see Asia Pacific and commodity markets active on a number of fronts between China manufacturing and service PMI reports, the main basket of monthly Japanese indicators and New Zealand business survey data. Markets may remain active right through to the weekend as Friday brings German employment, GDP for the UK and Canada and personal income for the US including the latest core PCE inflation report which is an indicator the Fed uses. So there is a lot of potential news that could move the markets in addition to end of week/month/quarter/year positioning nad preparation for next week’s developments.
There have been no major corporate reports after the US close today.
Significant announcements released overnight include:
Germany consumer prices 1.6% vs street 1.8% vs previous 2.2%
Canada industrial prices 0.1% vs street 0.4%
Canada raw material prices 1.2% vs street 0.9% vs previous 1.7%
US Q4 GDP update 2.1% vs street 2.0%
US Q4 core PCE inflation 1.3% vs street 1.2%
US jobless claims 258K vs street 247K
US natural gas (43 BCF) as expected
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)
10:30 am AEDT Japan unemployment rate street 3 0%
10:30 am AEDT Japan consumer prices street 0.2%
10:50 am AEDT Japan industrial production street 3.9%
11:00 am AEDT NZ ANZ activity outlook previous 37.2
11:00 am AEDT NZ ANZ business confidence previous 16.6
12:00 pm AEDT China manufacturing PMI street 51.7
12:00 pm AEDT China non-manufacturing PMI previous 54.2
3:00 pm AEDT Japan vehicle production previous 3.8%
4:00 pm AEDT Japan housing starts street (1.4%)
4:00 pm AEDT Japan construction orders previous 1.1%
7:00 am BST Germany retail sales street 0.4% vs previous 2.3%
8:55 am BST Germany employment change street (10K)
8:55 am BST Germany unemployment rate street 5.9%
9:00 am BST Norway unemployment rate street 3.0%
7:00 am BST UK Nationwide house prices street 4.0%
9:30 am BST UK GDP update street 2.0%
10:00 am BST Greece retail sales previous (1.3%)
8:30 am EDT Canada Jan GDP street 1.9%
8:30 am EDT US personal income street 0.4%
8:30 am EDT US personal spending street 0.2%
8:30 am EDT US core PCE inflation street 1.7%
9:45 am EDT US Chicago PMI street 56.9
10:00 am EDT US consumer sentiment street 97.6
9:00 am EDT FOMC Dudley speaking
10:00 am EDT FOMC Kashkari speaking