morning 6-14


  • This headline will make traders nervous over weekend “US BLAMES IRAN FOR TANKER ATTACKS”-Reuters and this TRUMP, ASKED HOW TO STOP IRAN, SAYS ‘WE’RE GOING TO SEE’-Fox news
  • A Morgan Stanley Gauge of U.S. Business conditions  dropped this month by most on record to lowest level since 2008
  • *Swap spreads have seen a steady diet of receiver flow and nervousness about negative convexity pervades the market. Thus, the way to lay off this rising option risk is to buy underlying securities such as the Eurodollar strip to alleviate the gamma risk”  Reuters
  • IEA monthly report “Global oil supplies will increase far more then demand next year”-Bloomberg(BB)
  • Chinese economic data showed retail sales beat expectations but Industrial Production missed badly slowed to weakest pace since 2002
  • Broadcom earnings missed and company lowered outlook as they Say” Trade war with China will wipe out a rebound in orders had been predicting”=BB
  • Probability for June rate cut was 15% on Monday now stands at 31%

 Very little good news as you can tell from above headlines and thus Risk Off theme for markets so far today. Spoos -6 handles, Nasdaq -50, both  trading right in middle of Overnight range Stocks in Europe lower as 18-19 Stoxx sectors trading lower on day led by technology which is down 1.8%, Bunds +30 ticks yields -2 bps trading at all time low yields of -.27%  10 year yields at 2.07% ish  YTD lows are 2.05%. Gold on the Bid approaching 2018 highs as it quietly trades higher and more responsive to issues at hand. Lumber headed for best weekly gain since 1995 as production curtailment finally doing its job and Copper Surprisingly, Not surprisingly little changed. Grains still dealing with more rain trade higher again today and Nickel headed for best weekly gain in 4 months as severe weather and flooding could hamper shipments._BB

 Retail sales today could be a big deal but a bad even ugly number is already priced into future rate cut expectations, a strong number likely to provide a bit of selling initially but will not last long. Industrial production at 8; 15 what get too much attention and then Michigan confidence is a preliminary look at June.

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