Stock markets around the world got off to a sluggish start this week with mainland China indices falling another 5% or so and others dropping at a more moderate pace. Indices have bounced back nicely since 5:00 am EST when the People’s Bank of China announced a surprise 0.50% cut to bank reserve requirements enabling them to increase lending.
Leap Day trading now finds the FTSE and US index futures for the Dow and S&P down only 0.2-0.4% and tending higher. The Dax is still down about 1.0% held back by a surprise decline in German retail sales.
Trading in other markets has been mixed as well. Crude oil is trading moderately higher amid reports Nigeria and other OPEC countries have been coming on side for a potential meeting on freezing production in March. Oil currencies like CAD, NOK and RUB are trading down slightly against a climbing USD. There have been moderate defensive flows today with JPY and gold also among the stronger performers. Sterling continues to stabilize but remains well below $1.4000.
Today begins a big week for economic news with Canada producer prices and US Chicago PMI due this morning. Tonight brings an RBA interest rate decision in Australia (no change expected) with global manufacturing PMI reports Tuesday, US ADP payrolls Wednesday, heading toward US and Canada employment reports on Friday.
Mining and resource exploration stocks may also be active over the next couple of days with the Prospectors and Developers Association of Canada (PDAC) conference underway in Toronto, a time when explorers like to announce assay results and make a big splash at the show.
News this week may continue to impact speculation on what moves the Fed, ECB and Bank of Japan may make at their meetings later this month.