Thursday was a day of backing and filling for world markets with stocks, commodities and currencies all staging corrections of recent moves, but at the same time holding key technical levels like breakout points, round numbers, and moving averages. US indices fell 0.2% while the FTSE declined 1.1% and the Dax
dropped 1.25%. Brent and WTI crude also backtracked falling 1.0-1.3% on the day but holding above $50 per barrel. Canadian indices fell 0.6% but interestingly declines were led by the consumer sectors rather than the resource or financial sectors.
USD regained its footing following a bout of recent weakness, knocking a number of majors back on their heels by 0.4%-0.5% including EUR, GBP, AUD and CHF. CAD and JPY held steady relative to USD. The strongest performer on the day was NZD which continued to rally and is up 1.5% over the last 24 hours after the RBNZ decided not to cut interest rates as many has expected. Although the central bank hinted future cuts remain possible traders seem to be taking the approach that rising house prices in Auckland and rising commodity prices make future dovishness less likely. Precious metals continued to climb with gold gaining 0.75% and silver soaring 1.7% indicating some capital may be seeking out cheap defensive places to park.
Tomorrow brings May employment data for Canada, one of the first reports that could really measure the impact of the Alberta wildfires on the Canadian economy. The fires forced the temporary shutdown of over 1 million barrels per day of oil sands production and forced 90,000 people to evacuate the City of Fort McMurray. With thousands of people temporarily displaced during the month, but with the city now reopen and people returning to work the job reports for the next two months could be substantially distorted. For May, I’m going to guess a 10K decrease in jobs mainly due to the wildfire impact.
There have been no major corporate announcements so far this evening.
Significant announcements released overnight include:
US jobless claims 164K vs street 270K
US natural gas 65 BCF vs street 76 BCF
Canada new house prices 2.1% as expected
Germany trade balance €25.6B vs street €22.8B
Germany labour costs 3.1% vs previous 2.1%
Sweden household consumptn 2.4% vs previous 1.9%
UK trade balance (£3.2B) vs street (£3.7B)
Greece unemployment rate 24.1% vs previous 24.2%
Greece industrial production 2.8% vs previous (4.0%)
Greece consumer prices (0.9%) vs previous (1.3%)
Upcoming significant economic announcements include:
(Note: 11:30 am in Sydney/Melbourne is currently 1:30 pm in Auckland, 4:30 pm in Vancouver, 7:30 pm in Toronto/Montréal, 12:30 am in London and 8:30 am in Singapore)
9:50 am AEST Japan producer prices street (4.2%)
7:00 am BST Germany consumer prices street 0.1%
7:45 am BST France industrial production street 1.0%
9:00 am BST Norway consumer prices street 3.1%
9:00 am BST Norway producer prices previous (14.3%)
9:30 am BST UK construction output street (4.8%)
9:30 am BST UK BoE/INS inflation forecast previous 1.8%
8:30 am EDT Canada employment change street 1.8K
8:30 am EDT Canada full-time jobs previous (2K)
8:30 am EDT Canada part-time jobs previous 0
8:30 am EDT Canada unemployment rate street 7.2%
10:00 am EDT US consumer sentiment street 94.0