Traders continue to be in a positive mood heading into the holidays with the Santa Claus rally continuing right along. With most of the big December decisions now put to bed traders appear to be getting ready for light holiday trading.
This is one of the most favourable times of the year for stocks with traders ready to put 2016 to bed and optimistic about opportunities for 2017. This has propelled indices upward, particularly the Dow which continues to advance on the 20,000 level today climbing to within 20 points of that big round number.
Capital has been flowing out of defensive havens once again. JPY has come under renewed pressure following the Bank of Japan meeting. Although the bank kept policy on hold and said some nice things about the economy, traders took comments from Governor Kuroda on not changing the target for Japanese bond yields while other countries yields are continuing to creep higher as dovish. The weakening Yen has kept a tailwind behind the stocks of Japanese exporters sending the Nikkei to within a few hundred points of the 20,000 big round number.
In addition to Japan, New Zealand could be a focus in today’s Asia Pacific trading with trade data due and ahead of tomorrow’s GDP report. Technical action in Australian stocks near a 52-week high may also attract attention.
Crude oil may be active today between US inventory reports. API inventories fell by 4.2 mmbbls reversing last week’s big increase that was not confirmed by the DOE number anyway. This week’s DOE report is expected to be a 2.5 mmbbbl drawdown due mid-morning Wednesday.
There have been no major announcements after the US close today.
Significant announcements released overnight include:
Canada wholesale sales 1.1% vs street 0.6%
Germany producer prices 0.1% vs street (0.2%)
UK CBI distributors 35 vs previous 26
Upcoming significant economic announcements include:
(Note: 11:30 am in Sydney/Melbourne is currently 1:30 pm in Auckland, 4:30 pm in Vancouver, 7:30 pm in Toronto/Montréal, 12:30 am in London and 8:30 am in Singapore)
8:45 am AEDT New Zealand trade balance street ($500M)
10:00 am EST US existing home sales street 5.50M
10:30 am EST US DOE crude oil inventories street (2.5 mmbbls)
10:30 am EST US DOE gasoline inventories street 1.3 mmbbls