European stock markets are mostly moving sideways, DAX and FTSE 100 are posting marginal gains and the Euro Stoxx 50 is up 0.01%. Sterling remains under pressure and the FTSE 100, which is dominated by large multinationals, continues to benefit and the index managed to reach new highs, amid ongoing modest outperformance, versus the DAX. Eurozone markets mostly managed to recover early losses as oil prices stabilized, but markets remain lackluster amid a lack of key data. The better than expected French production numbers early in the European session also didn’t have too much of an impact. U.S. same store sales bounced in the first week of January while Canadian housing starts continued to impress.
Oil prices have moved higher today, with WTI presently up 0.6% at $52.20, retracing some of the 4%-odd decline of Monday. A softer dollar has aided the rebound, though speculative positioning remains at extreme longs, which unwind if the market doesn’t stay strong. Market participants continue to scrutinize the compliance among the key oil producing nations who signed up to the output trimming accord, while U.S. production appears gearing up.
French IP Rose More than Expected in November
French industrial production rose 2.2% month over month in November, more than expected with October revised up to -0.1% month over month from -0.2% month over month reported initially. Manufacturing production rose 2.3% month over month, after falling -0.6% month over month in the previous month
After two consecutive week of declines, U.S. chain store sales bounced 2.2% in the week ended January 7, after a 2.9% drop at the end of December and a 0.9% slide the week before that. On an annual basis, sales slowed to a 1.1% year over year rate from 1.3% year over year clip. Cold weather, post-holiday promotions, and gift card redemptions pushed sales last week. Department store sales remained weak, however, as they were over the holiday season. In fact, the report said department stores contracted on a comp basis for an eighth consecutive quarter.
Canada housing starts jumped to a 207.0k unit pace in December from a revised 187.3k pace in November. The acceleration left starts running well above expectations in December compared to forecast of a 190.0k climb. Multi-unit starts surged 13.9% to a 120.8 growth rate in December from the 106.0k clip in November. Single unit detached starts grew 8.1% to a 66.9k pace from 61.9k. This is a firm report that suggests underlying momentum in Canada’s housing construction has yet to be impacted by the government housing measures that began in October.