From Morgan Stanley:
“China’s equity exchange-traded funds saw the biggest outflows of any emerging market in the past week, while spot CNY trading is on its way to having the busiest week of the year as average volume for the past three days is running above US$32bn a day”
Continuation of this week’s/Months theme of worries in Emerging markets causing domestic currencies and benchmark stock markets to trade lower ,Pushing US dollar higher and Increasing the cost of Debt financing. India Rupee all time low vs Dollar, Indonesia Rupiah 3 year low. Yesterday Big Tech Was the Big Loser in US same in Europe this morning. Stoxx 600 tech index -1.7%, tech stocks biggest decliners in Dax, which is trading down 1%, Europes Loss leader. German CPI to be released at 7:00 CST, No surprises expected, Day 1 of EU summit Underway no tape bombs seen yet. Watching the 2700 Level in Spoos touched twice this week but has to crack. NASDAQ is the canary in the coalmine over last few days so keep an eye there for overall stock Direction. Italian Auctions overnight where in line to weak, BTPs have clawed back 50 +ticks to sit unchanged and Bunds trending higher all morning as some angst regarding that EU summit has sellers putting hands in pocket. DXY or dollar index touched last week’s highs which is highest level in year, 95.54.The stronger the dollar=Weak emerging markets which should equate into Higher treasuries.
Regarding the white House Stance on China trade Policy. Confusion still reigns regarding what stance the President is taking on china the Softer approach brought forth by Mnuchin or the harsh hawkish sought by trade advisor Navaroo. Any headline leaning one way or another could have an impact on stocks. Shanghai closed down .9%, South Korean Stocks -1.19%
• Other markets show Silver -.9%, Gold steady, Aluminum and copper-1.1percentage, Spoos and Soybeans Little Changed.
• From WSJ macro-Economic advisors see 5.3% Q2 US GDP. Yesterday treasury secretary Mnuchin hinted at a very Strong Q2 GDP
• Today’s Economic Calendar Shows last look at Q1 GDP, Shouldn’t matter
• Feds Bullard speaks 9:45
From Morgan Stanley: