Equities rebound continues after positive US retail sales report - 16.2.2016

US markets were closed for a President’s Day holiday on Monday but stock futures were rising as global stocks recovered. The dollar strengthened against most other currencies, live dollar index data indicate the ICE US Dollar Index, a measure of the dollar’s value against a basket of six major currencies, rose 0.6% to 96.541. US stock futures are rising today pointing to a higher opening after stocks closed higher on Friday as investor confidence was buoyed by a report of better than expected 0.2% rise in retail sales in January. Today at 14:30 CET Federal Reserve Bank of Philadelphia President Patrick Harker speaks on economic outlook at University of Delaware. At the same time February Empire State Manufacturing Index will be published. The tentative outlook is negative. At 16:00 CET National Association of Home Builders February Housing Market Index will be released. The tentative outlook is neutral. At 22:00 CET December Treasury International Capital Long Term Purchases will be published.

European stocks closed higher on Monday as global stocks and commodities rebounded on Friday after a slump spurred by concerns about slowing global growth. The euro weakened against the dollar as European Central Bank President Mario Draghi said the governing council will not hesitate to expand its monetary stimulus program at its March policy meeting if the market turmoil continues. At the same time the German central bank revised downward its price inflation forecast to 0.25% this year compared to its earlier estimate of 1.1%. The Stoxx Europe 600 closed up 3% on hopes of further easing by the ECB, Germany's DAX 30 climbed 2.6% to 9206.84, France's CAC 40 and UK’s FTSE 100 indexes jumped 3.0% and 2.0% respectively. Bank stocks were among the best performers. Italian bank stocks soared on reports ECB is considering purchasing the bad loans from Italian banks in the framework of its asset purchases program, but Mario Draghi denied such plans. Shares of Banca Monte dei Paschi di Siena rallied 9.2%,Unipol Gruppo Finanziario jumped 7.7%. At 10:30 CET today January Consumer Price Index will be released in UK. The tentative outlook is positive for Pound. At 11:00 CET January ZEW Economic Sentiment for Germany and euro-zone will be published. The tentative outlook is negative for euro.

Nikkei edged 0.2% higher today after rallying 7.2% on Monday on expectations of more stimulus by the Bank of Japan as the fourth quarter GDP fell at an annualized rate of 1.4%. The yen is weakening against the dollar as safe haven demand subsides and investor sentiment continues to improve after China reported that new bank loans hit a monthly record of 2.5 trillion yuan ($385.5 billion) in January. Chinese stocks are rising with financial stocks leading the gainers and Shanghai Composite Index up 3.2% today.

Oil futures prices are rising sharply today in anticipation of a possible agreement on crude output cut or freeze as the Saudi Arabian and Russian energy ministers are to meet in Qatar. The March WTI was up 4.6% at $30.78 a barrel on Nymex while April Brent crude rose 4.2% to $34.80 a barrel on London’s ICE Futures exchange. Traders expect the global oversupply of crude oil will persist in the medium term. The International Energy Agency estimates global oil demand growth will likely fall to 1.2 million barrels a day compared with 1.6 million barrels a day in 2015 while major oil producers like Russia and OPEC are producing at record levels in an effort to defend their market shares.