Stock markets around the world are on the rebound to start the week as US officials spent the weekend dialling down tensions with North Korea. The Hang Seng is up 1.3%, the Dax is up 1.1%, the FTSE and US index futures are up 0.5%. Even with the overnight gains, however, the Dow remains below 22,000, although the Dax has regained 12,000.
On the flip side, capital is coming back out of defensive havens. Gold is down 0.6% and the Yen is falling as well. Despite this decline, the Nikkei fell 1.0% as Japanese traders caught up to Friday's declines. It's also possible that traders saw the stellar 4.0% growth in Q2 GDP for Japan (way above street 2.5%) as giving the Bank of Japan room to cut stimulus in future.
The Hang Seng's gain came despite softer than expected Chinese retail sales and industrial production numbers. This weakness had a bigger impact on resource markets. WTI crude is down 0.6% this morning, dragging on CAD. Australia stocks managed to rally 0.6% overnight, but Canadian resource stocks could struggle with gold and oil both trading lower today.
Canada's external affairs minister Freeland is set to speak on NAFTA today, but the street is more likely to respond more to how hard line the US sounds on NAFTA talks in the coming days. Canada house prices may attract attention with sales slowing dramatically in the Toronto area under the new rules on foreign ownership.
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