Markets continue to sail through choppy waters continuing a pattern of up and down days. Downward momentum from yesterday's selloff followed through Asia Pacific trading but reversed in Europe where the FTSE is up 0.6% and the Dax is up 0.3%.
Crude oil remains in the spotlight with WTI and Brent both up 0.6% and WTI still trading above $45.00. API inventories rose by 1.1 mmbbls less than the 2.9 mmbbl bounce expected by the street after last week's massive 11 mmbbl decline. This sets the stage for a potentially big DOE storage support. The street is expecting DOE inventories to rebound 4.0 mmbbls after falling a huge 14.5 mmbbls last weeek. Another lower than expected build would confirm strong energy demand while a higher build could undermine the price rally.
Currencies and bonds have been mixed overnight on continues uncertainty over monetary policy
heading into next week's Fed and Bank of Japan meetings. JPY continues to weaken on speculation a cut deeper into negative rate world may be discussed at next week's BOJ meeting. GBP is up slightly as slightly better than expected UK job creation and rising wages indicate a steady to strong UK economy putting fears of a Brexit recession further to rest.
The fertilizers and agricultural sectors may be active again today on more merger activity in the group. Earlier in the week Potash and Agrium completed a merger deal. This morning Bayer AG announced it has agreed to purchase Monsanto after raising its bid to $128/share in cash which could increase takeover speculation among the remaining independent players in the group.
Today energy commodities, stocks and related currencies capture the spotlight. MXN may also continue to attract attention between oil action and polling suggesting Donald Trump leading in the battleground state of Ohio. We also could see positioning ahead of a flood of US economic figures including retail sales Thursday and inflation on Friday.
There have been no major corporate announcements this morning.
US API crude oil inventories 1.1 mmbbls vs street 2.9 mmbbls
UK jobless claims 2.4K vs street 1.8K vs previous (8K)
UK 3M employment change 174K vs street 171K
UK unemployment rate 4.9% unchanged as expected
UK average weekly earnings 2.3% vs street 2.1%
UK average weekly earnings previous revised up to 2.5% from 2.4%
NZ REINZ house sales (3.1%) vs previous (10.1%)
Australia consumer confidence 101.4 vs previous 101.0
Japan industrial production (4.2%) vs previous (3.8%)
Sweden GDP 3.4% vs street 3.1%
Eurozone industrial production (0.5%) vs street (0.8%)
Upcoming significant economic announcements include:
8:30 am EDT Canada Teranet house prices previous 10.9%
10:30 am EDT US DOE Crude oil inventories street 4.0 mmbbls vs previous (14.5 mmbbls)
10:30 am EDT US DOE gasoline inventories street (1.1 mmbbls) vs previous (4.2 mmbbls)
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