The rebound in stocks that started in North American trading on Friday has continued into the new week with Asia Pacific and European markets staging catch up rallies. The Nikkei and the Hang Seng posted 300 point gains up from oversold positions while the Dax has gained nearly 150 points. Chinese inflation came in as expected giving the PBOC room to help the economy along as needed. Over the weekend, Russian troops near Ukraine continued to move back after exercises near the Ukraine border ended, US air strikes put ISIS forces back on their heels, another ceasefire started in Gaza and Turkish PM Erdogan won re-election. With so many hot spots out there at the moment, the winds of political change can come and go at any time. It looks like we may also be getting some follow through into North American trading today US indices posting moderate gains in morning trading. Precious metals, however, have held their ground on a day when one would expect to see big outflows with gold near $1,310 and silver near $20.00. In paper currencies, NOK and SEK have been rallying with higher than expected Norwegian inflation potentially putting pressure on the Norges Bank to raise interest rates. Similarly, JPY and CHF are holding steady. The flat action in defensives suggests that traders recognize that even if the political situation improves, the economic (too strong in US, too weak in Europe), financial, seasonal and other risks facing markets haven’t gone away completely. A quick study of how deep the recent declines have been across major indices suggests excluding the big drop in the Dax, we have seen about a 5% decline on average in recent weeks, a moderate correction. While we may be due for a rebound out of short-term oversold conditions over the next day or so, calling an end to the summer market correction would be premature at this point. Dax (11.2%) Hang Seng (2.8%) FTSE (5.0%) Nikkei (7.0%) Dow (5.1%) Nasdaq (4.2%) S&P 500 (4.3%) With earnings season winding down, the end of QE3 approaching and the historically seasonally weakest period of the year for stocks just getting underway we may continue to see a number of opportunities for traders emerge in the coming days and weeks. Corporate News Over the weekend, Standard and Poors cut its outlook on Canadian banks to negative from stable, blaming the potential impact of new government policies on bail-ins. Economic News Economic reports released overnight and this morning include: China consumer prices 2.3% as expected China producer prices (0.9%) as expected Canada housing starts Norway consumer prices 2.2% vs street 1.5% Norway producer prices (1.7%) vs previous (1.2%) Economic reports due later today include: There are no announcements scheduled for North America later today.