Market action has really picked up since ECB president Draghi’s press conference started at 8:30 am EDT today. He has remained is dovish mode indicating covered bond purchases are underway and asset back securities purchases should begin shortly as part of a two-year stimulus program in a bid to shake the moribund Eurozone economy out of the doldrums and fight off a potential recession. Since he started speaking, indices on both sides of the Atlantic including the Dow and the Dax have been rallying, while EUR has plunged over a penny taking out $1.2500 and diving further. With the EUR and JPY becoming even more dovish in the last week and the Bank of England still in neutral, the Fed’s eventual move toward normalizing interest rates has left it in an even more hawkish position relative to other central banks (even through it is actually neutral on monetary policy at the moment in between tapering ending and rate hikes starting), which has sparked another big breakout for the USD. Renewed interest in USD this morning has sent commodities lower again with gold falling toward $1,140 support and WTI crude oil giving back some of yesterday’s gains. Among paper currencies, to no surprise EUR and the pegged CHF and DKK are the worst performers, while AUD and NZD are the top performers having received a boost from positive Australia job numbers overnight. CAD is trading down moderately against USD today with crude oil backsliding but the loonie could get some support from better than expected building permits and anticipation of tomorrow’s employment report. Canadian stocks could be active today with many senior TSX stocks out with earnings this morning, many of which beat expectations, like Canadian Tire and BCE, while SNC Lavalin may get the wrong kind of attention from the triple whammy of missing on earnings, cutting guidance and laying off staff. US technology stocks may also be active particularly Tesla Motors where traders have been responding positively to earnings despite soft guidance on supportive comments from management. We may also see positioning in the US ahead of tomorrow’s nonfarm payrolls after another decline in jobless claims pointed toward a healthy employment market. Corporate News Tesla Motors $0.02 vs street $0.01 on sales of $932M beating street $892M. 2014 delivery guidance for 2014 cut by 5-7% to 33,000 cars, Model X launch delayed several months to Q3 of 2015. Symantec $0.48 vs street $0.42, guides next Q EPS to $0.47-$0.50 vs street $0.50 Qualcomm $1.26 vs street $1.32, guidance next Q $1.18-$1.30 vs street $1.43, guidance FY $5.05-$5.35 vs street $5.60. SNC Lavalin $0.45 vs street $0.80, cuts FY guidance to $2.15-$2.40 from $2.80-$3.05, laying off 4,000 workers Canadian Tire $2.17 vs street $2.00, 5% dividend increase Sun Life $0.76 vs street $0.74 BCE $0.83 vs street $0.77, maintains guidance Telus $0.58 vs street $0.61 Molson Coors $1.46 vs street $1.48 Canadian Natural $0.89 vs street $0.79 Economic News Economic reports released overnight and this morning include: The OECD updated many of its GDP growth forecasts today World 2014 3.3% 2015 3.7% US 2014 2.2% 2015 3.0% Eurozone 2014 0.8% 2015 1.1% Japan 2014 0.9% 2015 1.1% China 2014 7.4% 2015 7.0% UK monetary policy decision no change to interest rate or QE as expected ECB monetary policy decision no change to interest or deposit rate as expected US jobless claims 278K vs street 285K Canada building permits 12.7% vs street 5.0% UK Halifax house prices 8.8% vs street 9.1% UK industrial production 1.5% vs street 1.6% UK manufacturing production 2.9% vs street 2.8% Germany factory orders (1.0%) as expected Australia employment change 24K vs street 20K vs previous (23K) Australia full-time jobs 33K vs previous 21K Australia part-time jobs (9K) vs previous (51K) Australia unemployment rate 6.2% as expected NZ house prices 5.9% vs previous 6.4% Japan leading index 105.6 vs street 105.5 Economic reports due later today include: 3:00 pm GMT UK GDP estimate previous 0.7% 10:00 am EST Canada Ivey PMI street 57.3 10:30 am EST US natural gas street 86 BCF FOMC members Evans, Powell and Mester speak through the day
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