Stock markets around the world have been climbing overnight, catching a tailwind from manufacturing PMI reports that had no major disappointments and several positive surprises. Mediterranean countries did particularly well with Spain, Italy and Greece all beating the street or showing improvement, along with Sweden. EUR rebounded a bit on the news while USD slipped back a bit. CNY fell on speculation that with the currency now officially about to be included in the IMF’s Special Drawing Rights basket, that the government may not intervene to support the currency as actively in forex markets. Australia had a particularly good day with manufacturing PMI and building approvals coming in well above expectations and the RBA confirming its neutral stance on rates with no easing in sight unless things really go off the rails. India’s RBI also stayed the course on monetary policy. This news along with another rally in copper sent both AUD and the S&P/ASX soaring to the top of the class with NZD gaining in tandem. UK manufacturing PMI was a bit soft but some retrenchment is not unusual following a period of strong growth like the one the UK has experienced through much of this year. Today’s Canada GDP reports could be quite significant which may indicate how the rebalancing of the Canadian economy away from an overdependence on the oil sector is going with other areas benefitting from the lower loonie. GDP is the last major Canada data point before tomorrow’s Bank of Canada meeting and may indicate if the bank is likely to maintain interest rates as expected or if it is under any pressure to deliver a surprise rate cut. With the FOMC potential rate hike two weeks away and many central banks staying in neutral, the ECB is looking increasingly lonely in the stimulus/dovish camp heading into its meeting on Thursday. Two sectors could attract interest in stock markets today. US retailers may continue to see attention from Cyber Monday sales reports. It appears that the online division of many major traditional retailers did really well with demand overwhelming some sites. Canada banks are also in focus after Bank of Montréal kicked off earnings week with spectacular results while Bank of Nova Scotia was more subdued. Corporate News Bank of Montreal $1.90 vs street $1.74, 2.4% dividend increase, Bank of Nova Scotia $1.46 vs street $1.44, no dividend change, credit loss provision $551M vs street $502M Canadian Oil Sands Guides 2016 CFPS to $1.31 just below street $1.33 Economic News Significant announcements released overnight include: ICYMI from yesterday IMF Special Drawing Rights Basket (starting Oct 1 2016) USD 41.9% up from 41.7% EUR 30.9% down from 37.4% CNY 10.9% up from zero JPY 8.3% down from 9.4% GBP 8.0% down from 11.3% Australia RBA interest rate 2.00% no change as expected India RBI repurchase rate 6.75% no change as expected Germany unemployment chnge (13K) vs street (5K) Germany unemployment rate 6.3% vs street 6.4% Italy unemployment rate 11.5% vs street 11.7% Eurozone unemployment rate 10.7% vs street 10.8% Italy GDP 0.8% vs topstreet 0.9% NZ QV house prices 15.0% vs previous 14.0% Japan capital spending 11.2% vs street 2.2% Australia building approvals 12.3% vs street 5.7% Australia commodity index (22.0%) vs previous (19.8%) Manufacturing PMI reports: China official 49.6 vs street 49.8 China official non-manufacturing 53.6 vs previous 53.1 China Caixin 48.6 vs street 48.3 Australia 52.5 vs previous 50.2 Japan 52.6 vs previous 52.8 India 50.3 vs previous 50.7 Sweden 54.9 vs street 54.0 Poland 52.1 vs street 52.6 Norway 47.6 vs street 47.8 Spain 53.1 vs street 51.7 Italy 54.9 vs street 54.2 France 50.6 vs street 50.8 Germany 52.9 vs street 52.6 Greece 48.1 vs previous 47.3 UK 52.7 vs street 53.6 Upcoming significant announcements include: 8:30 am EST Canada Sept GDP street 0.4%vs previous 0.9% 8:30 am EST Canada Q3 GDP street 2.3% vs previous (0.5%) 10:00 am EST US construction spending street 0.6% 12:45 pm EST FOMC Evans speaking Upcoming Manufacturing PMI reports: 7:00 am EST Brazil previous 44.1 9:30 am EST Canada previous 48.0 9:45 am EST US Markit street 52.6 10:00 am EST US ISM street 50.5 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.
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