The Euro gave back some its recent gains overnight as macro data released today is forecasted to show declines in French and German consumer confidence data and markets prepare for the next EU summit meeting on Wednesday. The drop in the Euro was the start of some moderate US Dollar strength during the session, which was aided by intervention comments from the Japanese Finance Minister and weaker macro data out of Australia brought some buying back into the US Dollar.
In Asia, equities are mixed with Japanese stocks lower on negative corporate earnings (with Nissan being the primary example) and Chinese markets higher on forecasted improvements for September’s manufacturing data. US stock futures are little changed, as markets await today’s macro data, which will come in the form of the Case Shiller Home Price report and the Federal Reserve’s Richmond Manufacturing survey.
Market attention is slowly starting to shift to corporate earnings reports, as this will be key for gauging sentiment going forward. Today’s releases will be seen from UPS, 3M, Amazon.com and McKesson Corp. In Europe, the main earnings releases will come from UBS and Deutsche Bank.
Yesterday’s main earnings story came from Netflix, which dropped more than 27% in the aftermarket session after the company released a statement lowering its fourth profit forecasts. The main positives during the New York session came from Caterpillar (which is generally thought of as a leading proxy for the US economic activity), Oracle, and a steady slow of M & A stories which helped the S&P close higher on the day and brought some support back to the high yielding currencies.
Macro data out of Australia yesterday showed that the national Conference Board’s survey of leading economic indicators saw a moderate drop to 120.5 and this was matched by consumer inflation data out of New Zealand, which showed a drop to 0.4% (from 1.0% previously). Both of these releases support the idea that the RBA and RBNZ will continue expressing a dovish bias at their policy meetings. The turn from the previous tightening cycle from both central banks should continue to be a key factor in the currencies for both regions and suggests that longer term tops are in place at the highs seen earlier this year.