North American traders return to work today to find markets mixed and pretty much unchanged from where we left off last week.
Over the weekend and yesterday negotiations with Greece continued but did not reach a deal. Although both sides appear to be inching toward a deal and there appears to be room for compromise, talks continue to break down over the language of a deal, particularly over whether the old bailout program would be extended or not.
Still, the street appears to be taking this all in stride as part of negotiations and there aren’t any major signs of panic out there, European indices
are up on better than expected German ZEW survey results while Greece 10-year treasury yields remain below 10%.
In fact, capital has been flowing out of defensive havens like gold, JPY, CHF and USD back into resource/cyclical currencies like SEK, CAD, AUD, NOK and NZD.
Crude oil has been picking up as well particularly Brent which continues to trade above the $60.00 level while WTI holds above $50. Natural gas is picking up a bit coming off a bitterly cold weekend but remains stuck below $3.00 with only a few weeks left to go in home heating season.
Today’s trading indicates that traders still expect a Greece deal to get done although as we saw with the SNB last month a negative surprise could bring violent swings so its best not to get too complacent about this.
US indices appear set to start their trading week on the back foot after Empire manufacturing came in slightly below expectations, but could be impacted through the day on overseas developments. Earnings season is winding down, so corporate news may be slower. In the coming days, many traders may look to earnings from major retailers for comments on how lower energy prices have affected consumer spending trends.
There is no major corporate news this morning
Economic reports released overnight and this morning include:
US Empire manufacturing 7.7 vs street 8.0
UK consumer prices 0.3% vs street 0.4%
UK core CPI 1.4% as expected
UK retail prices 1.1% vs street 1.3%
UK producer input prices (14.2%) vs street (11.1%)
UK producer output prices (1.8%) vs street (1.4%)
UK house prices 9.8% vs street 9.5%
Germany ZEW current 45.5 vs street 30.0
Germany ZEW expectations 53.0 vs street 55.0
Greece consumer prices (2.8%) vs street (2.7%)
Sweden consumer prices (0.2%) vs street (0.3%)
Singapore GDP 2.1% vs street 1.7%
Economic reports due later today include:
9:00 am EST Canada existing home sales previous (5.8%)
10:00 am EST US NAHB housing market index street 58