Global markets continue to stabilize and digest the big repositioning moves of the last week. US index futures, the Hang Seng, the FTSE, and the Dax are all down 0.1% to 0.3% this morning. The Nikkei rallied another 1.0% on further JPY weakness.
Crude oil came under pressure overnight again, falling 1.3% and taking WTI back closer to $45.00. So far this appears to be a normal trading correction of yesterday's huge 5% rally sparked by a 3.6 mmbbl increase in US API inventories which was more than expected. Oil may remain active through today's weekly DOE inventories. Into the afternoon focus may start to move back to OPEC speculation from US fundamentals.
The pullback in oil has dragged on CAD a bit but not more than the general pullback in major currencies like gold, EUR and GBP on US dollar gains. St. Louis Fed President Bullard, currently an ultra-dove, thinks one rate hike will be enough to take the Fed to neutral. Note, however, that after the December meeting he will not have a vote for two years and a lot can change over that time.
Overall, traders continue to almost universally expect a December rate increase. Traders may look to another busy day for Fed speakers for an indication of how many rate hikes to expect next year with 2017 regional voters Harker and Kashkari speaking.
Earning may also continue to attract attention today. Canadian grocers Loblaw and Metro plus Agilent in US tech all beat the street overnight while Lowes missed badly.