Yesterday’s US rally, which saw the NASDAQ soar 2.2%, has sparked a wave of buying in overseas markets. The Nikkei soared 3.4%, and the Hang Seng gained 0.8% in Asia Pacific trading, while in Europe, the Dax is up 1.2% and the FTSE is up 0.9%.
US index futures are up 0.2%, while the 10-year treasury note yield is steady near 3.65%. US producer price data was mixed this morning with changes over month worse than expected but changes over year better than expected. The only major US economic reports left to come out ahead of next Wednesday’s Fed decision on interest rates are retail sales and industrial production on Tuesday.
Speaking of interest rates, the European Central Bank cut its benchmark rate by 0.25% to 3.50% as had been widely expected. The Euro is actually up slightly on the news, perhaps some traders had been speculating on a larger cut that did not materialize. The Fed is widely expected to cut by 0.25% on Wednesday, while the Bank of England is widely expected to stay the course next Wednesday.
Commodities continue to bounce back from recent weakness. US Crude Oil is up 1.1% but still trading well below $70.00/bbl, while Copper is up 1.7% and Natural Gas is up 0.3%. In precious metal trading, Gold is up 0.5% and Silver is up 1.0%.