ay and June have historically been two of the weaker months of the year for stocks but have been acting better than usual through the spring so far this year. Trading over the last couple of days suggests that we may be heading into a seasonal correction after all.
The Hang Seng fell 1.1% overnight but downward pressure has really increased in Europe where the Dax and IBEX are down 2.3%, the CAC is down 1.9% and the FTSE
is down 1.6%. US index futures for the Dow, S&P and NASDAQ are down 0.4%-0.7%. WTI crude oil is down 1.1% retesting $50.00 as support now.
Some may blame uncertainty over upcoming big events including Fed and Bank of japan meetings next week plus the UK Brexit vote and Spanish election later in the month for sending capital to the sidelines and back into defensive havens like gold and JPY. S&P suggested today that there could be a run on UK financial assets should Leave win. This sounds like another desperate cry for attention as people increasingly dismiss and tune out the Chorus of Brexit Doom as noise and propaganda.
Actual economic data shows that the UK economy continues to accelerate heading into the big vote with UK construction output rising in the most recent month more than expected and the Bank of England raising an inflation forecast. Industrial production in France and Italy also beat the street.
Overall, it looks like while there is some uncertainty and the potential for volatility which could create trading opportunities in the coming weeks, current weakness may also be related to technical exhaustion and seasonal trends reasserting themselves.
Today brings May employment data for Canada, one of the first reports that could really measure the impact of the Alberta wildfires on the Canadian economy. The fires forced the temporary shutdown of over 1 million barrels per day of oil sands production and forced 90,000 people to evacuate the City of Fort McMurray. With thousands of people temporarily displaced during the month, but with the city now reopen and people returning to work the job reports for the next two months could be substantially distorted. For May, I’m going to guess a 10K decrease in jobs mainly due to the wildfire impact.
There have been no major corporate announcements in North America so far today.
Significant announcements released overnight include:
Bank of Russia surprise 0.50% interest rate cut to 10.50%
UK construction output/month 2.5% vs street 1.4% and previous (3.6%)
UK construction output/year (3.7%) vs street (4.8%)
UK BoE/INS inflation forecast 2.0% vs previous 1.8%
France industrial production 1.9% vs street 1.0%
Italy industrial production 1.8% vs street 1.0%
Germany consumer prices 0.1% as expected
Norway consumer prices 3.4% vs street 3.1%
Norway producer prices (11.9%) vs previous (14.3%)
Japan producer prices (4.2%) 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)
8:30 am EDT Canada employment change street 1.8K
8:30 am EDT Canada full-time jobs previous (2K)
8:30 am EDT Canada part-time jobs previous 0
8:30 am EDT Canada unemployment rate street 7.2%
10:00 am EDT US consumer sentiment street 94.0
CMC Markets is an execution only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
CMC Markets er en ‘execution-only service’ leverandør. Dette materialet (uansett om det uttaler seg om meninger eller ikke) er kun til generell informasjon, og tar ikke hensyn til dine personlige forhold eller mål. Ingenting i dette materialet er (eller bør anses å være) økonomiske, investeringer eller andre råd som avhengighet bør plasseres på. Ingen mening gitt i materialet utgjør en anbefaling fra CMC Markets eller forfatteren om at en bestemt investering, sikkerhet, transaksjon eller investeringsstrategi. Denne informasjonen er ikke utarbeidet i samsvar med regelverket for investeringsanalyser. Selv om vi ikke uttrykkelig er forhindret fra å opptre før vi har gitt dette innholdet, prøver vi ikke å dra nytte av det før det blir formidlet.