Stock markets around the world have been mixed overnight. The Nikkei rose 0.9% while the Hang Seng fell 0.1%. In Europe the FTSE is flat while the Dax is down 0.5%. US index futures are slightly in the green today along with the UK trading up 0.1%. Currencies have also been relatively quiet overnight, the one exception being NZD, advancing ahead of today’s New Zealand central bank meeting. CAD is the top performing major currency today rallying on the back of rising oil prices.
Trading action has been focused on commodity markets where Brent and WTI continue to leave $50 in their dust, gaining over 1% on bigger than expected 3.6 mmbbl drop in US API inventories with DOE inventories due mid-morning. Metals are also up today with copper climbing 0.6% and silver gaining 2.4%.
Commodity traders have responded favourably to the latest China trade report which showed imports falling a lot less than expected in USD terms and rising more than expected in CNY terms a sign that China’s demand for resources may be starting to pick up again. Japan’s GDP report was revised upward as expected but more importantly consumer spending beat the street echoing sings of a reviving consumer recently seen in US and European economic reports.
Rising metal and energy prices may help to boost interest in miners and energy stocks today and may partially explain the FTSE’s outperformance relative to its continental counterparts. A much better than a much better than expected UK industrial production report building on recent positive house price and retail sales highlights that contrary to dire warnings from some quarters, the UK economy is actually expanding and accelerating heading toward this month’s Brexit vote.
Action in commodities and resource stocks may also drive Canadian markets today. Retailers may also attract attention with reports out from Lululemon (NASDAQ:LULU) and Dollarama (TO:DOL) and Hudson's Bay (TO:HBC) scheduled to report results tomorrow. Lululemon’s report was mixed with earnings falling 5% from last year and missing expectations by a penny but sales rose 17% and sales forecasts for the year were revised up slightly. Dollarama beat the street on both sales and earnings.