Stock markets around the world have been climbing overnight, catching a tailwind from manufacturing PMI reports that had no major disappointments and several positive surprises. Mediterranean countries did particularly well with Spain, Italy and Greece all beating the street or showing improvement, along with Sweden. EUR rebounded a bit on the news while USD slipped back a bit.
CNY fell on speculation that with the currency now officially about to be included in the IMF’s Special Drawing Rights basket, that the government may not intervene to support the currency as actively in forex markets.
Australia had a particularly good day with manufacturing PMI and building approvals coming in well above expectations and the RBA confirming its neutral stance on rates with no easing in sight unless things really go off the rails. India’s RBI also stayed the course on monetary policy. This news along with another rally in copper sent both AUD and the S&P/ASX soaring to the top of the class with NZD gaining in tandem.
UK manufacturing PMI was a bit soft but some retrenchment is not unusual following a period of strong growth like the one the UK has experienced through much of this year.
Today’s Canada GDP reports could be quite significant which may indicate how the rebalancing of the Canadian economy away from an overdependence on the oil sector is going with other areas benefitting from the lower loonie. GDP is the last major Canada data point before tomorrow’s Bank of Canada meeting and may indicate if the bank is likely to maintain interest rates as expected or if it is under any pressure to deliver a surprise rate cut.
With the FOMC potential rate hike two weeks away and many central banks staying in neutral, the ECB is looking increasingly lonely in the stimulus/dovish camp heading into its meeting on Thursday.
Two sectors could attract interest in stock markets today. US retailers may continue to see attention from Cyber Monday sales reports. It appears that the online division of many major traditional retailers did really well with demand overwhelming some sites. Canada banks are also in focus after Bank of Montréal kicked off earnings week with spectacular results while Bank of Nova Scotia was more subdued.
CMC Markets is an execution only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.