In the wake of yesterday’s big broad based global selloff across multiple asset classes, investors have been trying to pick up the pieces this morning. US index futures are trading up 0.2%-0.7%, trying to regain their footing from this week’s selloff that included drops of 1.0% to 1.8% for major US indices yesterday. Over in Europe, the Dax is flat and the FTSE is up 0.6%.
US treasury yields continue to climb with the 1-year yield approaching 5.50% and the 10-year yield approaching 4.50%. This has kept pressure on bonds, and also paper currencies with the Euro and Pound plus the Canadian and Australian Dollars all down 0.3%-0.5% today.
Energy and metals markets, however, are bouncing back this morning. WTI Crude Oil is up 1.1% and Natural Gas is up 1.6% with the oil price regaining $90.00/bbl. In metals action, Platinum is up 2.3%, Copper is up 0.7% and Gold is up 0.3%.
Results from overnight Flash PMI survey results, the first peek at September economic conditions suggest a growing split between different sectors of the economy. Echoing yesterday’s dismal Philadelphia Fed Manufacturing Survey, Flash PMI reports for Australia, Japan, Germany, France and the Eurozone indicated a weakening global Manufacturing sector and a strengthening global Service sector. The UK, however, had the opposite trend with Manufacturing strengthening and Services weakening. Flash Manufacturing (street 48.0) and Flash Service (street 50.6) reports for the US are due at 10:00 am EDT.
Retail sales excluding autos for Canada came in stronger than expected (1.0% vs street 0.4% and previous 0.1%), although the headline number was a bit soft. UK retail sales reported earlier today were worse than feared (-1.4% vs street -1.2% and previous -3.1%), but not quite as bad as last month.