Disappointing GDP report from Italy, per Reuters “Data Showed Italian Economy had ground to a Halt” GDP reading was lowest since Q4 2014. BTP HAS tanked on Report, Bunds rallied, as weaker growth does not give the Populist government much evidence that Country can run a high deficit and expect economic growth to pay for it. Euro Zone GDP also missed expectations y/y 1.7% vs. f/c 1.8% down from last quarter’s 2.2%. Euro lower not a surprise as Europe’s growth may have peaked. Spot Dollar Index, DXY trading up towards 2018 highs, have not seen the usual strong negative correlation with Commodities, but that may change if new 2018 highs are scored. Euro trading 1.1349, the 2018 lows are 1.1301. Individual German States CPi released intermittently overnight are pointing to national reading that likely will beat Consensus, this has weighed a bit on Bunds ,capping some of the strength seen overnight.
The new “trade idea” discussed last few day Buy spoos on the Close and Sell on open likely to be a winner again today. Yesterday Afternoon say a massive amount of selling pressure with 15 minutes left in the day as Spooz took out prior day’s lows with big volume only to quickly turn around and rally 40 handles hard into close. This morning European Bourses mixed Dax, Mib and Cac a bit lower after gapping higher then trading/chopping lower. Exact opposite in Bunds gapped lower then eventually filled that gap. Currently bunds 10, BTPs only down 106 ticks yields +8 bps, off worse levels of day. Spoos +14 handles, Nasdaq +32 handles
Oil trading down this Morning 1.2% in Brent .8% in WTI.More production from North Sea and Comments from IEA director saying, “OPEC cuts may not be right course of action amid loss of production from Other OPEC members.” WTI Z8/Z9 calendar trades in Contango for first time this year, a bearish Sign. Copper trading lower for six the consecutive day, any thought or hopes of a squeeze have not materialized just yet.45 SPX company’s report earnings this morning and Facebook reports after the close.
• Trade/tariff comments from president Trump regarding China is a reminder that this fight has not ended
• The Yuan traded to 6.9774 this morning, closer and closer to the very important seven handle.
• BP higher on day after adjusted earnings beat consensus by $1B –Bloomberg
• Rio Tinto shrugged off worries about China saying mood is good and order books filler for copper and iron ore due to stimulus-Bloomberg
9:00 Consumer Confidence
No Fed speak as members move into blackout period before next week meeting