Stock markets around the world have continued to stabilize overnight. The Nikkei and US index futures are up 0.2% while the FTSE is up 0.5% and the Dax is up 0.3%. Traders should not get complacent and take this as a sign of happy days returning. US indices remain well below where they were before Wednesday's selloff, and there is a lot happening in other markets.
Crude oil is rallying again today. Both WTI and Brent are up over 1%, challenging $50.00 and $53.00 respectively on speculation of more market support at next week's OPEC meeting. A six month extension to current cuts had been the baseline of expectations. This week several countries have indicated support for an extension of nine months or more. Overnight reports suggest an OPEC comittee is also looking at deeper supply cuts to shore up the market and reduce the inventory overhang.
In currency markets, the big story today is that the US Dollar has turned south again, falling against gold, EUR, JPY and other majors. GBP has regained $1.3000. Even CAD, which has been struggling all week is gaining on the greenback today.
This is important because earlier in the week, a selloff in the US Dollar preceded the plunge in stocks. This bearishness comes with President Trump looking to change the topic as he goes out on the road to Saudi Arabia, Israel, Italy (twice) and Belgium.
On top of potentially having to deal with his troubles at home from a distance, he faces potential challenges on this trip as well. In the Middle East he may try to get the peace process going again while explaining why he gave Israeli intelligence to Russia. In Europe, he may try to get higher spending commitments out of NATO allies. At the G7 summit trade is likely to top the agenda, especially after finance ministers failed to agree on anything.
Canadian markets could be active today. The oil rally could boost interest in energy stocks. The loonie had been under pressure on uncertainty over the upcoming NAFTA renegotiation. With the White House sending a letter to Congress yesterday to start a 3 month review before talks can start in August (just ahead of the big US budget battle) the loonie has bounced back. Bombardier could be active with aerospace becoming the latest dispute area with the US accusing the company of dumping CSeries jets and Canada threatening to retaliate by stopping negotiations to purchase military jets from the US. Inflation and retail sales numbers may keep Canada in focus ahead of the Victoria Day long weekend.
There have been no major corporate announcements this morning.
Significant announcements released overnight include:
Germany producer prices 3.4% vs street 3.2%
Upcoming significant economic announcements include:
8:30 am EDT Canada retail sales street 0.3% vs previous (0.6%)
8:30 am EDT Canada retail ex auto street 0.2%
8:30 am EDT Canada consumer prices street 1.7%
8:30 am EDT Canada core CPI common street 1.3%
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