Stock markets around the world have remained in consolidation mode overnight with US index futures and the FTSE up 0.1% , while the Dax
is up 0.5%. Crude oil is steady today with Brent sitting just under $50.00 and WTI pausing near $47.00. The big action overnight has been in currency markets,
USD has sold off again overnight as traders took a dovish reaction to yesterday's split over the central bank's dual employment and inflation mandate. Members focused on inflation think the FOMC can hold off on raising rates while those focused on employment thing the Fed should start raising rates soon with two members having called for a July rate hike.
Fed members remain indecisive and have been switching sides further muddying the waters. Today both NY Fed President Dudley (who shifted from dovish to hawkish this week leaving the door open to a Sept rate increase) and SF President Williams (who shifted from the neutral to dovish camp this week) both speaking. Dudley, one of the Big 3 at the Fed may attract the most attention from traders wondering if he is serious about September of if his goal was to reduce complacency, return the fear of the Fed and keep the central banks options open.
The USD retreat has lit a fire under other currencies Precious metals are rallying with Silver and Platinum outpacing Gold to the upside.
GBP has been one of the biggest gainers among majors today, getting an added boost from a better than expected retail sales report and talk that the recession that the Chorus of Brexit Doom had predicted may not materialize after all. In the FOMC minuted Fed members noted Brexit volatility had subsided and Brexit was not expected to have any impact on the US economy.
With data indicating Brexit fears were overblown, GBP has started to recover, rallying out of double bottom bases against USD and JPY and causing a recent breakdown against EUR to fail. EUR is up against USD today in line with other majors with no major surprises in the ECB minutes while French employment in Q2 came in a lot better than expected. JPY has not participated in the rally with the 100 level for USDJPY
still well defended.
CAD continues to climb, outperforming other resource dollars like AUD and NZD. Unlike the other two, the Bank of Canada has not cut interest rates in over a year. The Loonie may remain active through tomorrow's Canada CPI and retail sales reports which may indicate how much pressure, if any, Governor Poloz is under to make a move on rates.
Better than expected results from Wal-Mart who beat the street on earnings, sales, same store sales and guidance may attract attention to US retail stocks again today. Natural gas could be active around today’s storage report as we move through summer heating season.
Canadian Solar may also be active today on mixed results where stellar sales and earnings way above expectations may be offset by sales guidance which came in well below expectations suggesting some sales may have been pulled forward.
Canadian Solar $0.68 vs street $0.37 Wow! Sales $805M vs street $717M. Guides Q3 sales to $660-$710M way below street $788M Ouch!
Wal-Mart $1.07 vs street $1.02, same store sales 1.6% vs street 1.0%, guides next Q to $0.90-$1.00 vs street $0.93
Cisco Systems $0.63 vs street $0.60
Net App $0.46 vs street $0.36
UK retail sales 5.9% vs street 4.2%
UK retail ex auto 5.4% vs street 3.9%
Eurozone consumer prices 0.2% as expected
Eurozone core CPI 0.9% as expected
France Q2 umemp change (74K) vs street (15K)
France Q2 unemp rate 9.9% vs street 10.1%
Australia employment change 26K vs street 10K vs previous 8K
Australia full-time jobs (45K) vs previous 38K
Australia part-time jobs (71K) vs previous (31K)
Australia unemployment rate 5.7% vs street 5.8%
Japan trade balance ¥513B vs street ¥273.2B
NZ ANZ consumer confidence 117.7 vs previous 118.2
Upcoming significant economic announcements include:
8:30 am EDT US jobless claims street 265K
8:30 am EDT US Philadelphia Fed street 2.0 vs previous (2.9)
10:00 am EDT FOMC Dudley press conference
4:00 pm EDT FOMC Williams speaking
10:00 am EDT US leading index street 0.3%
10:30 am EDT US natural gas street 25 BCF
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