China Retreats, US Rebounds as a Big Week for Data Begins

The last full business week of the year is looking to be a busy one for business news.

Asia Pacific markets sold off overnight with the Nikkei and the Hang Seng both falling 1.3%. China reported disappointing retail sales (1.3% vs Street 2.9%) and industrial production numbers (4.8% vs Street 5.0%), weighing on sentiment. Commodities are mixed on this news. Crude Oil is down 0.5%, but Copper, which is often sensitive to China news, is up 2.2%.

US index futures, conversely, are rebounding today with gains of 0.5% each for the three main contracts offsetting some of Friday’s 0.5% to 1.7% US index losses. European markets are also climbing with the FTSE up 1.0% and the DAX up 0.4%.

Currency action today finds the US Dollar sliding, sparking another rally for precious metals where Gold is up 1.2% and Silver is up 3.2%. Bitcoin is up 1.1% but it remains stuck below $90,000. The Yen is up 0.5% heading toward Friday’s Bank of Japan meeting where a 0.25% interest rate increase is widely expected, a contrast to the 0.25% rate cut the Bank of England is expected to deliver on Thursday. The other majors are all up about 0.1%.

Canada housing starts (254K vs Street 248K) were better than expected. Canada consumer prices (2.2% vs Street 2.4%) indicate inflation remains contained. The US Empire State Manufacturing Index (-3.9 vs Street 10.6 and previous 18.7) was even weaker than feared. The US NAHB Housing Market Index is due at 10:00 am EST.

With the holiday slowdown approaching there is a lot of economic data coming out this week. Tomorrow is catchup day for nonfarm payrolls with the October and November reports scheduled to come out. Tuesday also brings Flash PMI numbers and US October retail sales. Inflation numbers from the UK and US headline Wednesday and Thursday respectively. Friday brings retail sales reports for the UK and Canada.

There are a few notable earnings reports this week as well for investors to digest. Headliners include Micron Technology on Wednesday, followed by Nike, FedEx and Blackberry on Thursday. 

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