morning 2-21

*RTRS Source    US/China have started to outline commitments in principle on the hardest issues in the trade dispute marking the most significant progress to date towards ending the trade war; negotiators are drawing up 6 MOUs covering forced tech transfer & cyber theft; IP rights; services; currency ; agriculture & non barrier tariffs to trade

*Fed’s Clarida says lack of data still clouds U.S. economic forecast– it is not clear how much of growth slowdown the United States is currently seeing, in part because of incomplete data following the U.S government shutdown, Fed Vice Chairman said in a television interview aired on Wednesday.

* The release of the monthly PMI data from Europe.in the aggregate reported In-line to slightly better, the only sore spot and a big one is Germanys Manufacturing 47.6 vs. f/c 49.8.Dax took a hit on this release.

 The weakness in European Stocks continued after comments from Austrian Central Bank president and hawk, Nowotny he said no need for more Liquidity and ECB should have acted more quickly and raised rates. Dax further hit as the ECB minutes showed that members were not excited about issuing a new target loan program

 Both Stocks and Bonds lower this morning, Bunds reacting to a break in support levels being helped by some optimism regarding china trade news, both treasuries and U.K. Gilts following the lead of Bunds. Yesterday’s FOMC minutes not as Dovish as markets have been pricing in as no clear signal of an Easing bias was given in fact  I believe they left door open for  rate hikes to continue,if data cooperates. Dollar index steady the one standout currency is the Aussie dollar it is on the offer vs. all majors today as China has banned coal imports from that country.

 Commodities mostly lower Copper -.5%, Oil steady, palladium -1.4% and gold -.3% markets trading without a macro theme so far today. China pledged to buy $30B more of US agriculture goods  Soy +1%,Wheat + 2%  Corn +1.8%.A handful of Economic  data and a bit of Fed speak could be drivers of today’s flows.

Calendar:

  • 7:30 Durable goods, Jobless claims, Philly fed
  • 8:45 market PMI
  • 9:00 LEI and Existing home sales

FED speak:

  • 9:15  Williams and Daly discuss Inflation
  • 11:00 Vice chair Clarida
  • 12:30  Bullard and Quarles

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