With economic data and corporate earnings reports limited overnight, stock markets around the world have been drifting lower through the summer doldrums. European markets in particular have been underperforming, led downward by Spain and Italy, perhaps on a combination of Spain’s better than street but worse than last month employment gains, and continued shockwaves from Greece’s return to trading. Athens stocks did stabilize today with the benchmark index down only about 2% today. US stocks may still be impacted on an individual basis by earnings reports although the broader impact on markets from individual reports may be smaller as mid and small cap companies dominate the calendar. Later today Walt Disney and First Solar are due to report with Time Warner and Tesla Motors scheduled for tomorrow. Interestingly, while stocks seem to suggest a limited appetite for taking on new long positions, there is a clear flow of capital in currency markets from defensive plays toward more aggressive stances. The three worst performing majors on the day are USD, CHF and JPY, which suggests greenback action isn’t all about soft recent US data. Meanwhile AUD has lapped the field today in response to today’s RBA statement. The central bank maintained its 2.00% interest rate and comments on the Australian economy starting to grow again, even if slow, suggest it isn’t in a hurry to cut them again. Perhaps more importantly for trading, for the first time in ages, governor Stevens didn’t try to talk down the dollar, instead stating that AUD “is adjusting to the significant declines in key commodity prices”. Oil has been on the rebound today on no news with Brent and WTI both gaining about 1.5%, support appears to be coming in near $50.00 and $45.00 respectively. This rally has helped to support NOK and CAD today. With an election campaign underway in Canada and the outcome uncertain, data and poll results could have a particular impact on trading in the loonie over the next few months. Corporate News Archer Daniels $0.60 vs street $0.67 Mosaic $1.05 vs street $0.90 Economic News Significant announcements released overnight include: Australia interest rate 2.00% no change as expected India interest rate 7.25% no change as expected UK construction PMI 57.1 vs street 58.5 Spain unemployment (74K) vs street (44K) and previous (95K) Norway manufacturing PMI 45.8 vs street 44.0 Australia retail sales 0.7% vs street 0.4% Australia trade balance ($2.9B) vs street ($3.0B) Australia commodity index (20.2%) vs street (17.9%) NZ house prices 10.1% vs previous 9.3% NZ ANZ commodity prices (11.2%) vs previous (3.1%) Upcoming significant announcements include: 9:30 am EDT Canada manufacturing PMI previous 51.3 10:00 am EDT US factory orders street 1.8%
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