Global Stocks Advance as Crude Gains

26 June, 2017

Global Stocks Advance as Crude Gains

CAD was the biggest mover on Friday with a sharp fall after the Canadian CPI slowed even more than expected. At only 1.3% yoy, it is actually at the bottom of the Bank of Canada’s 1%-3% target range. This means that it will be less likely to have a rate hike during the July meeting; the probability of a hike plunged from 56% to only 37%.

The weak CPI figures make Wednesday’s speeches by Bank of Canada Deputy Governor Patterson and Governor Poloz to be even more important as they are going to give a better idea if the rate hike is actually possible or not. In addition, the GDP figures on Wednesday will also indicate the possibility of recovering inflation, too.

As soon as the European day starts, we are going to closely watch the IFO Expectations survey. Right now, as it is closely watched, it is expected to show a modest decline with regards to the current conditions and business expectations for the next six months.

That would be in consonance with the fall in the German composite PMI which was announced on Friday, and therefore, this won’t come as a surprise to the market and most probably won’t affect the euro in any way.

The British Bankers’ Association figures on loans for house purchase are predicted to slightly drop, too. This would be in line with the recent decline in property prices in the UK, probably due to the uncertainty around Brexit negotiations. Even though this wouldn’t be a surprise to anyone, it will still negatively affect the sterling.

Today, US durable goods orders are predicted to have a sharp fall again at the headline level and this is a result of a drop in aircraft and defense sales. Nondefense capital goods orders are expected to show a decent rise and this could help restore some confidence around US economic indicators and subsequently boost the dollar.

On a final note, later on today President Mario Draghi, the president of the European Central Bank, will make a speech in Portugal right before Janet Yellen appears in London tomorrow. Last week, markets were affected by a plunge in oil while equities, treasuries and the dollar all made little progress. Haruhiko Kuroda, Bank of Japan’s Governor will also be speaking at the ECB forum and therefore, the heads of the most important central banks have the opportunity today to shape discussion and offer more clues and solutions regarding future policy.


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