We are getting mixed signals from the bond market today. The US 10-year treasury note yield continues to climb, and is approaching 4.25%, suggesting that traders are expecting a slower pace of interest rate cuts from the Fed than previously thought. Meanwhile, the Bank of Canada is expected to announce a 0.50% interest rate cut to 3.75% when it releases its latest monetary policy decision at 9:45 am EDT, which would be a faster pace than previous cuts.
Coming off a mixed Tuesday, US index futures are trading down 0.3% to 0.5% this morning. Major European markets are down across the board including losses of 0.1% for the Dax and 0.5% for the FTSE.
The reaction to overnight earnings reports has been mixed. Texas Instruments is up 2.5% premarket after beating the street ($1.47 vs street $1.38). Starbucks is down 3.7% premarket in the wake of a big miss ($0.80 vs street $1.02).
There is not much economic news outside of US existing home sales. There may be come trepidation around the BRICS summit which continues today, but nothing major has come out from that as of yet.
Meanwhile, US Crude Oil is down 1.9% following a larger than expected build of 1.9 mmbbls in weekly US API Crude Oil inventories with the DOE number due at 10:30 am this morning. Gold is consolidating yesterday’s gains near $2,760/oz, while Silver has slipped back 0.9% and Copper is down 1.5%.