The big story overnight has been the US dollar's relentless drive higher against most other majors. Fed speakers this week have been leaning hawkish with even doves like Chicago Fed President Evans suggesting a rate hike is likely this year, maybe even November (which I doubt but they clearly want to keep options open).
Yesterday's smoking hot non-Manufacturing PMI report and surprise drop in oil inventories indicate a strong US economy that could withstand a rate hike. US index futures are down 0.2% on these hawkish headwinds.
Overseas, talk that the ECB could start tapering back asset purchases has gone quiet but not away. Strong factory orders and Construction PMI for Germany indicate that stimulus may not be needed as much just as it's reaching its limits anyway. Today's ECB minutes didn’t create any waves for European markets where a rally in EUR this week has held back European indices with the FTSE, DAX, and CAC all down about 0.3% so far today.
The higher USD and round number resistance have combined to stall WTI oil's advance at the $50 level for now with Brent trading near $52. With US inventories out for this week and surprisingly positive again, speculation could shift overseas. There have been rumours floating around that more informal talks among OPEC and Non-OPEC countries about production targets could be held this weekend or next week. We'll see...
In currency action this morning, the higher USD has sent GBP to another new low although the pace of declines is slowing. EUR has dropped back while JPY is steady and gold has bounced back a bit suggesting a bit of a defensive shift, particularly as commodity currencies like CAD, AUD and NZD have weakened overnight.
Today is quiet for scheduled news in North America, so we may see traders here prepare for tomorrow's big US nonfarm payrolls and Canada Labour Force reports which could kick off another round of central bank speculation on both sides of the border.