Risk appetite popped its head back in the markets but the Loonie failed to join the higher yielders as the EIA report showed a surprise buildup in stockpiles. The yen lagged while the dollar managed to regain some ground.
- Canadian building permits down 0.2% vs. projected 0.4% gain
- U.S. crude oil inventories up by 3.3M barrels vs. estimated 3.1M reduction
- U.S. consumer credit at $8.2B, lower than the $15.2B consensus
U.S. markets rebound
After closing consecutive days in the red, stock indices squeezed out some green as rumors swirled that former FBI head Comey probably won’t be throwing Trump under the bus.
In case you’ve been holed up and listening to nothing but Despacito all day (Can’t blame ya!), you probably got wind of speculations that Comey might unleash a tell-all on how the Donald has been cozying up to Russia. Any evidence of wrongdoing in terms of sharing highly-classified information could further delay or even prevent any fiscal policy changes (read: tax reform) from being implemented.
However, the text of Comey’s opening statement has just been released on the Senate Intelligence Committee website and it appears that his testimony might not be as shocking as many expect. Instead, he mentioned that the President simply asked for loyalty and that he wasn’t investigating Trump personally.
Still, Comey has to respond to Senate questions afterwards and that’s where the plot could thicken. In any case, U.S. indices closed higher for the day even as consumer credit slowed sharply in April to douse hopes of a rebound in spending.
- S&P 500 index is up 0.05% to 2,432.00
- Dow 30 index is up 29.83 points to 21,166.06
- Nasdaq is up 0.25% to 5,877.62
Oil, weak data weigh on CAD
The oil-related Loonie was hit by a double-whammy, as Canada printed a downbeat building permits report while the EIA noted a surprise buildup in crude oil supply.
Canadian building permits dipped 0.2% in April instead of rising by the projected 2.4% figure. On the upside, the previous reading was revised to show a smaller 4.9% decline.
Meanwhile, crude oil inventories rose by 3.3 million barrels, capping off more than a month’s worth of reduction in stockpiles to bring oversupply concerns back to the table. Analysts had been expecting another drop of 3.1 million barrels.
- U.S. WTI crude oil was down 5.02% to $45.77 per barrel
- Brent crude oil was down 3.99% to $48.10 per barrel
- S&P 500 futures were up by 0.03% to 2,431.50
- Nasdaq futures were up by 0.11% to 5,869.62
Major Market Mover(s):
The dollar clawed back some gains as investors were relieved to find out that Comey might not drop a bombshell in his upcoming testimony.
USD/JPY is up 40 pips to 109.81 (+0.37%), USD/CHF is up from .9619 to .9645 (+0.27%), EUR/USD is down to 1.1261 (-0.15%), and USD/CAD is up 61 pips to 1.3515 (+0.45%)
The Loonie was the weakest-performer of the bunch as it was dragged down by a bump up in oil stockpiles.
CAD/JPY edged down to 81.23 (-0.07%), NZD/CAD is up 52 pips to .9719 (+0.56%), AUD/CAD is up 105 pips to 1.0205 (+1.05%), and EUR/CAD advanced to 1.5221 (+0.34%).
The lower-yielding yen also trailed behind when traders were in the mood for more risk.
EUR/JPY ticked up from 123.38 to 123.70 (+0.11%), AUD/JPY is up from 82.12 to 82.91 (+0.97%), GBP/JPY climbed from 141.26 to 142.36 (+0.79%), and NZD/JPY is up to 78.98 (+0.48%).
Watch Out For:
- 12:01 am GMT: U.K. RICS house price balance
- 12:50 am GMT: Japanese final Q1 GDP (upgrade from 0.5% to 0.6% expected)
- 12:50 am GMT: Japanese current account balance (1.62T JPY expected, 1.73T JPY previous)
- 2:30 am GMT: Australian trade balance (1.91B AUD expected, 3.11B AUD previous)
- 2:30 am GMT: Chinese trade balance (336B CNY expected, 262B CNY previous)
- 6:00 am GMT: Japanese Economy Watchers Sentiment index