US traders return from the holiday weekend in a positive mood to find the S&P and NASDAQ trading at or near record highs.
Sentiment toward the US remains positive and its economic, financial and political stability appears to be attracting a lot of capital at the moment. USD is plowing ahead on anticipation of a more hawkish Fed going forward, gaining ground on all other majors, particularly JPY, AUD and NZD. A cabinet shakeup in Japan and talk of a slow economy, a sales tax increase delay and the potential for more reform has boosted the Nikkei
and knocked back JPY toward 105.00. AUD is trading lower following a stay the course RBA decision and statement while NZD is being impacted by more weak inflation numbers.
The biggest impact of the rising USD has been seen in commodity markets today with gold down near $20.00/oz and crude oil down over 1%. Wheat is holding steady despite increasing tensions over Ukraine with President Obama visiting Eastern Europe this week and more sanctions talk.
GBP and the FTSE are underperforming their continental counterparts today, and may become increasingly volatile over the next few weeks around the Scottish independence referendum being held on Sept. 18th.
CAD is taking a hit today along with other resource dollars which may be partly due to USD strength and partly due to concerns about softness in the Chinese economy following PMI reports. Both CAD and USD along with indices in both countries may be active to start the week, particularly later this morning with manufacturing PMI reports scheduled for both countries. The loonie may also see some positioning ahead of tomorrow’s Bank of Canada meeting.
Pembina Pipeline has agreed to purchase Vantage Pipeline for $650 million. Pembina also announced plans to build a new propane export terminal at Portland, Oregon.
The dollar store takeover war continues this morning. Dollar General has increased its hostile bid for Family Dollar to $80.00 per shares (that’s a lot of dollars) and has agreed to divest up to 1,500 stores if requested by competition authorities.
Overnight reports suggest that Tim Hortons is in talks to be acquired by Burger King. The most
Economic reports released overnight and this morning include:
Australia interest rate 2.50% no change as expected
UK construction PMI 64.0 vs street 61.5
Eurozone producer prices (1.1%) as expected
Spain unemployment 8K vs street 21K
NZ commodity prices (3.3%) vs previous (2.4%)
Manufacturing PMI highlights from over the weekend
UK 52.5 vs previous 55.4
Germany 51.4 vs previous 52.0
Sweden 51.0 vs previous 55.2
Greece 50.1 vs previous 48.7
Australia 47.3 vs previous 50.7
China 51.1 vs previous 51.7
Japan 52.2 vs previous 52.4
Economic reports due later today include:
9:30 am EDT Canada manufacturing PMI previous 54.3
9:45 am EDT US Markit manufacturing PMI street 58.0
10:00 am EDT US ISM manufacturing PMI street 57.0
10:00 am EDT US construction spending street 1.0%
9:30 am EDT Singapore PMI street 51.0
9:30 am EDT Singapore electronics sector street 51.9