Quarter End and Fiscal year end for US Government are a theme running through today’s markets. The latter important because Congress has till Midnight to Vote on a Continuing resolution or an extension of current Spending bill. Senate leader McConnell said “I’m optimistic it will pass” So are markets. Quarter end stats, per Bloomberg Most volatile Quarter in 4 years, 11 trillion erased from global stocks and bonds. Investors pulled $40b from emerging market stocks and bonds largest withdrawal since 2008.Oil set for worse quarter since 2009 as price dropped 24%, Gold set for 5th quarterly loss and commodities tracked by Bloomberg Commodity index have dropped 15 % worse quarter since 2008. So you can see why many want this quarter to end and end fast. Plenty of talk Of Buying stocks, All EM and DM stock indices are higher and selling bonds( treasuries and European Bonds are all lower).
Economic releases saw Euro Zone headline CPI dipped into negative territory for first time in 6 months, Expectations were for unchanged at Zero. Stocks did rally and euro sold off on the Pavlovian response of Low inflation=more QE, but bonds aren’t playing that game. Very well could be Month End/Quarter end flows dominate action. Out of UK, wages and a metric of household wealth were very strong, a positive for her currency and Rate hike expectations. Dollar and Pound up, Euro down but ranges tight.
Glencore not going into bankruptcy , defaulting on loans and not dragging commodity producers/Hedge funds with her at least for now. Stock bouncing again today. Macquarie bank said Credit concerns about company are overblown, and company unlikely to lose access to loans. As commodities weakened company’s profits weakened and concerns about her existence drove stock lower .All is well I guess. Volkswagen bouncing as it is possible that 1970’s law may exclude VOW from EPA lawsuit, Nice. Also China Is cutting by ½ tax on new small cars, which is putting bid into auto sector. China also cutting the down payment amount by 5% for first time home buyers. China closed for 1 week starting tomorrow
• Yellen speaks today(2:00) but should be a non-even as her topic is Community banking
• Russia has bombed ISIL targets in Syria
• Crop report at 11:00 slightly above average importance
• Weekly oil numbers from API showed Build but offset by Cushing draw