Major global indices plus crude oil have been trying to stabilize overnight following yesterday’s big selloffs. Italy and Spain have been leading the rebound just as they led on the way down earlier in the week, while the DAX
and US indices have posted only small gains.
The biggest action overnight has been in currency markets where USD has continued to advance against pretty much everything as yesterday’s stronger than expected durable goods orders, new home sales and consumer confidence keep speculation boiling away that Fed interest rate liftoff could still arrive in the second half of this year.
Despite stronger than expected Swedish economic numbers this morning, SEK is underperforming its peers. In the last few days SEK had rallied against EUR in particular and this appears to be a normal trading correction as traders speculate on how the Riksbank may respond to a recovering currency.
CAD and Canadian stocks have the potential to be active today. The Bank of Canada’s latest interest rate decision is due later this morning. With full time employment bouncing back, retail sales beating expectations for a second month in a row, oil on the rebound for now and core inflation running above 2.0%, an interest rate cut appears unlikely.
We could see CAD remain active over the next few days between today’s interest rate decision, Friday’s Canadian GDP report and next week’s employment numbers. Canadian bank stocks may also remain active this week as their earnings reports roll out. Bank of Montreal and National Bank kicked things off on a positive note today with positive surprises and dividend increases. So far so good, as the main themes to watch include the impact of the oil price crash on oilpatch lending and Alberta real estate/mortgages potentially offset by the positive impact of the lower loonie on other regions and international earnings.
Bank of Montreal $1.71 vs street $1.66, 2.5% dividend increase
National Bank of Canada $1.15 vs street $1.12, 4% dividend increase
Tiffany & Co $0.81 vs street $0.80, sales $962M vs street $919M
Economic reports released overnight and this morning include:
Australia leading index 0.1% vs previous (0.3%)
Sweden consumer conf 98.8 vs street 98.5
Sweden manufacturing conf 100.5 vs street 97.2
Sweden trade balance SEK 5.7B vs street SEK 4.0B
Economic reports due later today include:
10:00 am EDT Canada interest rate 0.75% no change expected
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