A day after the NASDAQ Composite Index reached 20,000 for the first time, US index futures are backsliding a bit this morning with declines of 0.1% to 0.4% in the wake of a disappointing US inflation report. Over in Europe, the FTSE, CAC and Dax are all flat. Asia Pacific markets rallied overnight, as both the Nikkei and the Hang Seng posted gains of 1.2%.
Heading toward next week’s big Fed decision, central banks and governments around the world remain dovish, suggesting concern about the state of their economies. This morning, the Swiss National Bank announced a surprise 0.50% interest rate cut to 0.50%, a 0.25% cut had been widely expected. The European Central Bank cut its benchmark rate by 0.25% to 3.15%. Yesterday the Bank of Canada announced a 0.50% rate cut for the second meeting in a row but, perhaps to stave off concerns the central bank was hitting the panic button, indicated that the pace of rate cuts may slow from here which actually helped the Loonie to bounce a bit.
The major paper currencies are quiet today with the exception of the Australian Dollar which is up 0.3% on stronger than expected employment numbers. Gold and Silver are both down 1.0% today Cryptocurrencies are mixed with Bitcoin down 0.2% and Ether up 3.6%.
US producer prices (3.0% vs street 2.6% and previous 2.4%) showed a surprise increase in inflation pressures. US weekly initial jobless claims also were worse than expected (242K vs street 220K). Tomorrow is quiet for economic news but reports pick up on Monday with China retail sales and flash PMI surveys.