After spending the first part of the week grasping for news to trade on, the market's appetite for news has been more than filed overnight with a lot more on the way from the US.
Stock markets remain choppy on a combination of seasonality and uncertainty over where interest rates are heading with traders wondering if the easy money party is coming to an end. US index futures are up 0.3% trying to rebound from yesterday's late slide, while major indices in Europe are flat this morning. The Nikkei fell 1.2% while the Hang Seng rose 0.7% in Asia Pacific trading.
Commodity markets are even more active again today. After being taken down hard to the mat over the last two days, crude oil is starting to rebound with WTI up 1.0% but still short of $45.00N and Brent up 1.2%. A witches brew of speculation on more production about to come on stream from Nigeria and Libya, lower demand forecasts from the IEA, mixed inventories from the US where good crude headline numbers were offset by higher inventories of refined products (gasoline and distillates) and speculation on the upcoming side meeting between Russia and OPEC countries may keep the bot boiling for a while yet.
Meanwhile, copper is soaring today, rallying 2.6% as traders view better than expected lending, retail sales and industrial production reports for China this week as favourable for resource demand.
Central banks are also in focus today. The Swiss National Bank kept its benchmark rates steady in negative territory. The SNB cut its inflation forecasts, threatened to intervene in forex markets if needed and indicated Brexit risks to the economy, all in a typical day's work. Meanwhile, another smoking hot UK retail sales report and a smaller than expected Eurozone trade surplus has me thinking that Continental Europe may be more at risk from Brexit than the UK, especially with GBP having dropped so much earlier this year.
The Bank of England stayed the course at its meeting today in a unanimous decision which is not a surprise considering they cut rates and increased asset purchases last month but they did leave the door open to another rate cut this year, likely to fight off criticism of its recent actions. Today's spectacular retail sales report suggests if anything the Bank of England has probably overdone it on stimulus already. Two members of the MPC appear to be thinking the same (Forbes and McCafferty) but also recognize the cost of changing the decision now would be too high. It does suggest, however, that any additional attempts at adding to UK stimulus would likely run into a lot more opposition.
With two more central banks essentially in neutral, focus now turns to the Fed and Bank of Japan meetings next week. Reports suggest the BOJ may be looking at a small push deeper into negative territory to (0.2%) from (0.1%). Considering that JPY has been rising into the meetings, such a move likely won't be enough to stop the US Fed from raising rates or signalling a December hike.
Today brings a flurry of announcements which may influence Fed speculation. Retail sales and industrial production are the headliners, but regional reports like Empire Manufacturing may attract attention as well if there are any surprises.