North American markets return to trading this morning from the Labor Day weekend and the end of summer holidays. US index futures are flat to up 0.1%, the Dax and FTSE are both down about 0.2%.
In Asia Pacific trading, the Nikkei gained 0.9% while the Hang Seng gained 0.8%. China reported a stronger than expected trade surplus overnight ($58.3B vs street $51.0B), with both export (25.6% vs street 17.1%) and import (33.1% vs street 26.8%) growth higher than expected. In Europe, the DAX and FTSE are down 0.2%
The US Dollar is on the rebound this morning, rallying 1.1% against gold, and climbing 0.4% against both the Canadian Dollar and the British Pound. This has put some pressure on commodities, which one would have commonly thought would do well on the positive China trade news. Copper and gasoline are both down 1.1%, WTI crude oil is down 1.3%, and natural gas is down 1.6%.
This week the main focus of economic news is on central banks. The Bank of Canada meets Wednesday with no changes expected during an election campaign. The European Central Bank meets on Thursday with investors looking for hints on whether the ECB is considering tapering its asset purchase program this year or continuing at the same pace into 2022. It’s a light week for earnings reports with a few numbers due from retailers including Gamestop in the US on Wednesday, followed by lululemon and Dollarama on Thursday in Canada.