The trading week kicked off overnight with overseas markets staging big catch-up rallies, including gains of 1.0% for the Nikkei, 1.1% for the FTSE and 0.7% for the Dax. Upward momentum appears to be fading, however, with US index futures down 0.6% to 0.9%, giving back some of Friday’s 1.4%-1.5% US index gains.
With the peak of mega cap earnings season and nonfarm payrolls behind us, investors have turned their focus back to the ongoing trade war and this week’s central bank meetings. On Wednesday, the Fed is expected to hold rates steady again, both in terms of the consensus estimate and the 10-year treasury note yield still hanging around 4.30%. On Thursday, the Bank of England is widely expected to deliver a 0.25% interest rate cut.
Gold is up 2.5% while Bitcoin is down 1.3% suggesting risk appetite may be easing and investors becoming more cautious once again. The US Dollar is retreating his morning, falling 0.7% against the Yen, 0.6% against the Aussie, 0.4% against the Euro, 0.3% against the Pound and 0.2% against the Loonie. Commodities are mixed today with Crude Oil down 1.6% and Copper up 1.2%.
In other economic news this week, Service PMI reports roll out today and tomorrow, then it’s a quieter week until Friday when China trade and Canada employment numbers are released.
Earnings season rolls on, dominated by large caps in Canada and mid caps in the United States. US headliners include Palantir Technologies later today, AMD tomorrow, ARM Holdings, Walt Disney and Uber Technologies on Wednesday, and ConocoPhillips on Thursday. Canadian headliners include Suncor Energy Tuesday, Manulife Financials and Great West Lifeco on Wednesday, Sun Life, BCE, Canadian Tire, and Canadian Natural Resources Thursday, wrapping up with Telus, Air Canada, and Enbridge on Friday.