World stock markets have been trading moderately higher overnight, clawing back some of Monday's losses. US index futures are up 0.3% while the FTSE is up 0.5%, the Dax is up 0.7% and Italy's FTSE MIB is up 1.7%.
The reaction to overnight news reports has varied from tepid to cautiously optimistic. Italy's rally has been sparked by the arrival of new PM Gentiloni, who is keeping the same finance minister, indicating continuity. Chinese stocks were flat although positive China retail sales and industrial production reports have boosted copper to a 0.3% gain.
Crude oil continues to climb, with WTI up 0.7% and Brent up 0.9%. The International Energy Agency indicated it expects the oil market to shift from surplus to deficit in the first half of 2017 if OPEC and non-OPEC producing countries to stick to their agreements.
Currency markets are steady today, with US dollar traders on pins and needles ahead of tomorrow's Fed interest rate decision and monetary policy outlook. A rate hike this week looks like a done deal. Traders may look to the dot plot, statement, economic projections and press conference. The US dollar rally has priced in a more agressive campaign of 2017 interest rate increases leaving it vulnerable if the Fed is not as hawkish as the street.