Stock markets around the world have been drifting lower into the weekend. US index futures are down 0.4%, the DAX, CAC and IBEX are down 0.7%, Italy's FTSE MIB is down 1.7% while the UK FTSE is in the green slightly.
News flow has been light overnight, but there has been quite a bit of chatter out of Europe about the ECB staying the course on stimulus, and out of Japan pushing for more stimulus at the Bank of Japan's meeting next week.
Interestingly, despite reports that some in the EU are planning on taking a hard line with the UK over Brexit in the hope that London will get frustrated and give up, the FTSE is outperforming continental indices today. It appears traders have recognized economic data from both sides of the channel indicate that so far Brexit and the accompanying fall in sterling has benefited the UK more than the EU and that with Continental trade surpluses falling the EU appears to have a lot more to lose from Brexit than the UK.
Crude oil continues to bounce around wildly with a 1% decline this morning erasing yesterday's similar gains in WTI and Brent. There hasn't been any new news overnight so energy commodities continue to be buffeted by several factors including: big swings in US stockpiles, speculation over US and Chinese demand, slowing global demand, increase supply coming from Libya and Nigeria and upcoming talks between OPEC producers and Russia. Down below $45 it looks like expectations of a deal coming out of the Algeria conference later this month are pretty low. We could see some trading action this afternoon on US drill rig activity which has bounced lately as is normal in the summer but is still well below where it was a year ago.
USD has been trading up slightly against gold and other major currencies this morning. The greenback could be active this morning around the consumer price inflation report, one of the last major pieces of data before next week's Fed meeting. Apple (NASDAQ:AAPL) may also remain in the spotlight with its big rally over the last few days on reports of strong demand for the new iPhone7 Plus. The big question facing Apple in particular is if momentum can continue into the weekend or if we could see come profit taking.
It’s quadruple witching day with a number of index and commodity futures and options expiring which could spark some volatility in the afternoon.