A roller coaster week for world stock markets and commodities like crude oil appears to be heading for a soft finish. Asia Pacific markets finished down slightly with European indices
down less than 1.0% for the most part and US indices also trading slightly lower to start the day.
Commodities are also pulling back on limited news overnight. Crude oil is down over 2% giving back much of yesterday’s rallies. Copper is also trading lower while grains are mixed around flat.
In currency markets today, USD is on the rebound once again outperforming most majors and gold. SEK is soaring on the back of better than expected Swedish GDP and employment numbers that suggest the Riksbank may not have to be as dovish going forward. On the flip side, CHF is dropping back along with gold while CAD and NOK are falling in tandem with the oil price.
Overall, today’s trading so far suggests that speculation for a Fed rate hike have taken a slightly more hawkish shift. US producer price inflation numbers were higher than expected. Meanwhile central banks in Russia and South Korea held interest rates steady which suggests that China’s recent market turmoil is not having a contagion effect on other countries. If China’s turmoil isn’t impacting monetary policy in nearby countries, it shouldn’t affect decision making at the Fed next week either.
Bank of Montreal agreed to purchase the transportation finance business of General Electric for $11.5B
Significant announcements released overnight include:
South Korea interest rate 1.50% no change as expected
Russia interest rate 11.00% no change as expected
US producer prices (0.8%) vs street (0.9%)
US PPI ex food and energy 0.9% vs street 0.7%
Sweden unemployment rate 6.4% vs street 6.8%
Sweden GDP 3.3% vs street 3.0%
UK construction output (0.7%) vs street 0.9%
Germany consumer prices 0.2% as expected
Spain consumer prices (0.4%) as expected
Italy industrial production 2.7% vs street 0.9%
NZ Business PMI 55.0 vs previous 53.5
NZ food prices (0.5%) vs street 0.6%
China new yuan loans 809B vs street 850B
Upcoming significant announcements include:
10:00 am EDT US consumer sentiment street 91.1
10:00 am EDT US 1-yr inflation estimate previous 2.8%
1:00 pm EDT US Baker Hughes drill rig count previous 864
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