In a quiet overnight session, S&P 500 futures are fractionally in the green (2,426, +0.2%) with European and Asian stocks as oil drops the second day after an initial ramp higher amid speculation that Libya and Nigeria may be asked to cap their production. Nasdaq 100 Index is again higher, following the biggest daily advance in more than a week, up 0.4% as of 6:20 a.m. in New York.

With Friday’s jobs data seen as largely favorable and the lack of wage growth expected to keep the Fed subdued, the focus is turning to Janet Yellen’s semi-annual testimony on monetary policy and a meeting of Canada’s central bank on Wednesday for the latest policy signals from the world’s major central banks.Over the past two weeks, markets have reassessed the outlook for tighter monetary policies from major central banks following a string of hawkish remarks. “We’ll see just how much substance there is to these comments on Wednesday, when the Bank of Canada announces its latest decision, with investors now expecting a 25 basis point increase,” said Craig Erlam, senior market analyst at OANDA. A rate rise from Canada’s central would be its first interest rate rise in nearly seven years

Global macro markets have traded with a cautiously positive tone as weekend’s G-20 meeting ended without market-moving surprises, while continued hawkish sentiment has pushed benchmark yields modestly higher. The yen slipped to fresh 2-month low against the dollar, trading at 114.22, after trade deficit data and BOJ Governor Haruhiko Kuroda reiterated that policy could be adjusted as needed. In Asia, stocks rose in Tokyo and Sydney, with the MSCI Asia Pacific Index rising 0.3% after hitting a five-week low Friday. MSCI’s broadest index of Asia-Pacific shares outside Japan advanced 0.4 percent while Japan’s Nikkei rose 0.8 percent to a one-week high helped by weakness in the Japanese currency; the Topix Index added 0.5%. Australia’s S&P/ASX 200 Index gained 0.4 percent. Hong Kong’s Hang Seng Index rose 0.7 percent, while shares on the mainland declined 0.2% after the PBOC drained net 30 billion yuan in liquidity after withholding open market operations for the 12th consecutive day even as the yuan strengthens for the first time in six days. Dalian iron ore reverses early loss to gain for the fourth day.

The big macro news overnight came out of China which reported inflation data, all of which was in line with expectations:

China’s PPI rose 5.5 percent in June from a year earlier, in line with the estimate in a Bloomberg survey as well as the reading in May – but well off the 7.8 percent reading four months earlier that increasingly looks like a peak. Economists forecast factory inflation at 5.3 percent at the end of this year and 2 percent at the end of 2018. As Bloomberg writes, rising factory prices in the world’s second-biggest economy had been touted as a possible circuit breaker for anemic global inflation, which continues to defy accelerating economic growth. The thinking was that higher costs in China would drive up the price of everything from footwear to electronics which in turn would help lift profits and wages. Yet those hopes appear to be fading. While China’s producer price index held up in June, much of the support came from higher commodity prices as companies restocked their inventories. That support is already fading as activity in the property and construction sectors remains soft and oil and raw materials prices decline, keeping factory prices lower.

A move by China’s regulators to curb risk in the financial system by targeting leverage will also act as a brake on the economy. So instead of spurring price gains China could become a source of global disinflation, according to Michael Every, head of financial markets research at Rabobank Group in Hong Kong. “It’s inevitable that PPI will go off of a cliff in the second half and into 2018,” Every said. “This is the last hurrah before deflation raises its ugly head again.”

European stock markets followed Asia higher, with blue-chip stock markets in London, Paris and Frankfurt up 0.2 to 0.5 percent in early Monday trade. European bourses were led higher by real estate and food companies, following a similar advance across much of Asia. The Euro Stoxx 50 index was 0.3 percent higher as of 10:42 a.m. in London.

The dollar was steady against most major currencies and bond yields were little changed after a selloff last week. Oil retreated for a second day while gold and silver fell.

Brent trades near $46.40/bbl, torn between renewed growth in U.S. rig count and speculation that Libya and Nigeria may be asked to cap their production. WTI remains near $44/bbl.

“The big story here goes back to Friday and the rise in rig count,” says Jens Pedersen, senior analyst at Danske Bank. “We really don’t have enough evidence yet to put the break on the expansion of U.S. production” On Friday, Baker Hughes reported that U.S. rigs again rose +7 to 763, after falling by 2 in the previous week, the first drop since January. The big oil weekend news came out of Kuwait which said that Libya and Nigeria may be asked to cap oil output, prompting an initial push higher in crude. Pedersen says Kuwait comments were slightly bullish, with market torn between those remarks and rig count in early trading Monday.

With global stocks close to all-time highs, investors continue to shrug off political uncertainty and Fed warnings about frothy risk levels and are placing their faith in a continued earnings expansion on broadening global growth. Germany’s trade surplus was higher than estimated as May exports beat forecasts, while U.S. employers added the most jobs in four months in June. PepsiCo Inc, JPMorgan Chase & Co, Citigroup Inc. and Wells Fargo & Co are set to report results this week.