Despite a positive earnings report from Intel (NASDAQ:INTC) and a headline beat from Yahoo (NASDAQ:YHOO) overnight, stocks are trading flat to slightly lower this morning with US Index futures, the FTSE and the DAX all down 0.1%.
Traders appear to be sitting on their hands awaiting tonight's final US Presidential debate. Markets appear to have fully priced in a Clinton win and also seem to be overly complacent about it leaving the door open to a Brexit-type of surprise.
Gold is climbing today, indicating that some traders may be getting concerned about US political risk ahead of the debate. Other markets that could be active around the event include Biotech stocks (sensitive to Clinton hostility) and the Mexican peso (sensitive to Trump hostility).
The USD is trading down slightly ahead of the debate. China GDP met expectations but was supported by higher than expected government spending. UK employment growth was better than expected supporting a bounce in the pound. More Fed speakers and the Beige Book regional economic report could keep Fed speculation simmering away in the background.
The Loonie could be particularly active today with the potential for market moving developments on two fronts.
Crude oil is rallying today with WTI and Brent both up 1.3%. A surprise drop in US API inventories and talk from Saudi Arabia that some non-OPEC countries are talking about joining a production freeze or cut deal has Black Gold trading higher this morning. Oil may remain active through the morning with DOE oil inventory data due. Last night CAD rallied in tandem with the API result. Energy stocks may also be active today, particularly after driller Halliburton (NYSE:HAL) posted a surprise profit.
Today's Bank of Canada decision may also have a big impact on CAD. Governor Poloz is expected to keep rates on hold today so traders are likely to focus on the statement for clues about future direction. The central Bank has been counting on a summer rebound from a terrible wildfire impacted spring.
In its last statement, Governor Poloz expressed concern about a sluggish July, but monthly GDP data later indicates it was not as bad as feared. Employment has been picking up lately and oil prices have held up so this time traders may be looking for a more upbeat tone anticipated by recent CAD gains. If the statement is overly cautious or negative it could raise speculation of a rate cut and drag on CAD.