have taken a cue from US indices and started to rebound, particularly in Europe ahead of Greece’s first bond issue since its debt crisis started. Although political risk concerns continue to swirl around Europe driving crude oil and wheat higher again today, financial risk concerns continue to fall with Greece’s treasury yield dropping back under 6.0% for the first time in over four years on better than expected industrial production.
Asia Pacific markets were mixed with the Nikkei selling off and the Hang Seng rallying. China-sensitive markets like indices, copper, AUD and NZD could be active through the week with China trade and inflation numbers on the way. Later today, NZ PMI, Australia employment and China trade could spark significant action across the region.
Alcoa kicked off earnings season with an encouraging result while winemaker Constellation Brands also beat the street. This has helped to shore up support for US indices like the Dow and S&P but it remains to be seen if the recent run by US indices toward all-time highs has already priced in strong earnings for this quarter.
Currency markets have been relative quiet today with gold testing its $1,300 breakout point as new support. NOK is the top performer benefitting from the Ukraine driven rally in Brent crude. SEK has dropped to the bottom of the league after a split vote and member projections suggested the Riksbank could cut interest rates again at a future meeting even though it held off this time.
Later today, US FOMC minutes are due but with the Fed currently on a consistent course of tapering, several FOMC members including Chair Yellen having spoken since the meeting and in the wake of last week’s US payroll reports, it appears unlikely there will be any surprises big enough to move the markets for very long.
Alcoa $0.09 vs street $0.05, stock up about 2% in initial aftermarket trading
Constellation Brands $0.81 vs street $0.76, guides full year EPS to $3.95-$4.15 vs street $3.96
Dollarama $1.17 vs street $1.10, sales $582M vs street $574M, raises dividend 14%
Economic reports released overnight and this morning include:
Sweden interest rate 0.75% no change as expected, but two of six members voted for another 0.25% rate cut
Poland interest rate 2.05% no change as expected
Greece industrial production 1.7% vs street 0.7%
UK shop prices (1.7%) vs street (1.5%)
UK trade balance (£9.0B) vs street (£2.1B)
Germany trade balance €16.3B vs street €17.5B
South Korea unemployment rate 3.5% vs street 3.6%
Australia consumer confidence 99.7 vs street 99.5
Australia home loans 2.3% vs street 1.5%
Economic reports due later today include:
10:30 am EDT US crude oil inventories street 0.75 mmbbls
10:30 am EDT US gasoline inventories street (1.0 mmbbls)
2:00 pm EDT US FOMC minutes