Futures in the S&P 500 are trading 10 points higher this morning following a global rally. In Asia, the Nikkei moved up slightly after three consecutive losses and shares in Hong Kong shot up 1.9% (China’s markets are closed all week). In Europe, the DAX is currently up 1.7%, followed by a 1.6% gain in British shares and a 1.5% in the CAC-40.
The dollar is generally weaker following a report from the UK’s Independent stating that multiple countries plan to stop trading crude oil in greenbacks. The newspaper said a number of Gulf states were in secret talks with Russia, China, Japan and France to replace the dollar with a basket of currencies and gold. Most nations in question have denied the report.
WTI Crude oil is currently up 66 cents to $71.07 per barrel, while Spot Gold is up $7.60 to $1024.90.
While officials from the Federal Reserve continue to reiterate the interest rates will remain exceptionally low for an extended period, Australia’s central bank became the first nation in the G20 to tighten monetary policy. The unexpected 25 basis point hike to 3.25% today was accompanied by a communiqué stating that Australia had weathered the storm better than other nations; it also noted that housing prices and financial stocks had risen in recent months.
Looking to today’s schedule the data load is relatively light on data. Weekly retail reports from the International Council of Shopping Centers and the Johnson Redbook will provide the latest information on consumption, but no major data will hit markets.
“As we approach the 2009 holiday season, at best, retailers are hoping for flat performance compared to last year,” said Ellen Zentner from BTMU in a weekly note. “Flat is the new up” is the new mantra for fashion retailers, she added.
Ian Shepherdson from High Frequency Economics was similarly pessimistic about retail sales in the final quarter of this year. “The fundamental problem, which will not go away any time soon, is that consumers are seriously strapped for cash,” he said. “The need for households to save more ― much more ― for an extended period means the math just does not work very well for retailers.”
Other Key Events Today:
9:45: ― Thomas Hoenig, president of the Kansas City Fed, speaks to an economic forum sponsored by the Fed’s Denver branch.
10:00 ― House Financial Services hearing on Capital Market Issues.
- Treasury Auctions:
- 1:00 ― 4-Week Bills
- 1:00 ― 3-Year Notes ($39 billion)
- 3:00 ― STRIPS