Clawing back some of Friday’s 1.1%-1.8% US index losses, US index futures are up 0.6% to 0.8% this morning. The price of Gold is down 0.5%, the price of Oil is down 1.1% and the price of Bitcoin is up 1.4%. This action suggests that some of the fear which gripped markets when the Israel-Iran war started last week has eased for now as the US and other parties remained on the sidelines through the weekend.
Overseas, the Nikkei gained 1.3% and the Hang Seng climbed 0.7% following the release of stronger than expected Chinese retail sales (6.4% vs street 5.0%). Retail sales numbers are the main data points due this week with the US out tomorrow, then Canada and the UK on Friday.
The G-7 meeting started yesterday and runs to Tuesday, but the bigger event for markets this week may be Wednesday’s Fed announcements including an interest rate decision and member forecasts. With the US 10-year treasury note yield steady near 4.45%, no change in rates is expected. Investors may look to the member forecasts for signs of whether the recent changes to tariffs have impacted inflation or interest rate expectations.
Today’s North American economic data has been mixed with Canada housing starts (279K vs street 248K) beating expectations and the US Empire State Manufacturing Index (-16.0 vs street -5.5) coming in much worse than expected.