said, she said Event driving flows this morning
From South China Morning post at 3:30 Ish
, US and China agree to tentative truce before G20 summit
around 4:45 this morning Chinese
Diplomat says NOT AWARE OF SCMP REPORT
ABOUT A TENTATIVE TRADE DEAL: BBG
is insisting that ban on tech sales to Huawei be lifted before any deal is signed …Not
good for negotiations I believe
leaders arriving in Osaka as I type, Plenty of tape bomb material Is possible over the next few days as world leaders meet face to face
the second time in a little over a week Goldman lowered end of year forecast
for US 10 year yields ,they predict
1.75%,joins peer JP Morgan
interest — a measure of a market’s liquidity — in the Eurostoxx futures index
hit record highs on a monthly basis of 4.61 million lots on Monday
CPI in line with expectations
GERMANY AND FRANCE, OTHER ALLIES,
TOLD U.S. DEFENSE CHIEF ESPER THAT 2015 NUCLEAR PACT ON IRAN MUST BE UPHELD,
SHOULD NOT BE JEOPARDIZED-Reuters
Donald Trump will have breakfast with Saudi Arabia’s Crown Prince Mohammad Bin
Salman before a high-stakes meeting with Chinese President Xi Jinping on
Saturday, White House spokesperson Hogan Gidley said.
comments Regarding Boeing sees stock 2%
Bloomberg Junk bonds have already returned more this year than last 2 years
Combined,searc for yield knows no bounds
Bonds higher stocks higher, Bund little
changed Dollar sideways as markets await Trade deal talks and on the lookout for Tape bombs related to trade and Iran. Stocks in Japan, China, and Hong
Kong closed higher, Dax up a touch. Gold pulling back from multiyear gains
trading back towards $1400 And Bitcoin
futures -13%.US economic calendar doesn’t offer much excitement, and a 7 year
auction at noon. Oil down a bit as it
has plenty of future event risk from trade talks, Iran and OPEC
meeting next Monday Tuesday.Copepr
little changed stuck in a tight range. Month end quarter end tomorrow.
Not to go down the rabbit hole too much but below find graph of term premium of treasuries maturing between 1-10 years via Bloomberg. More to it I know but one can think of Lower term premium as a risk on indicator as long dated rate expectations drop.A weekly chart below show levels at lowest price in a few years.
here is same metric on a daily chart over last 6 months.Notice the big drop in premium as markets priced fed rate cuts.
A bonus Chart below , Average German bond yield of all maturities on a weekly time frame,Not a big surprise but to see it visually drives home the point a bit more ..
the 17th time?? Mnuchin says, “Two sides are 90% of the way there
and I believe there is a pathway to complete this” Markets continue to trade off this “news” so why not keep rolling it
out Spoos +13 handles, Nasdaq +52 Dow + 100
Dax +.5% and majority of European Bourses are higher
API reported a big Draw in oil supplies 7.55 Million barrels Wti +1.9% Rumor
that PES Philadelphia refinery ,after a fire last week has put in motion the
process of shutting down . If true this will be a huge blow to East coast
gasoline supplies as this is the largest refinery on the coast and will drive
Currently gasoline +3%, Front month Crack spread +5%
and Intel are finding legal work arounds to continue to do Business with Huawei
+14% at one point overnight trading above 12,500
After yesterday’s Push back from Bullard’s “I think 50 Bps cut would be overdone” And Trade optimism Treasuries are trading lower
as the probability of 50 Bps cut in July has been cut in half, per Bloomberg
pricing.it is not zero let’s be clear on that it is roughly 20%. A story
circulating that Bullard was asked to be a Fed governor, a permanent voting member,
but he declined, President Trump trying to pack the governors with the ultra
doves. Dollar a bit higher today after posting best day in a week as the less
rate cut trade gives it a boost. Euro little changed and trading in a tight range
For the weekend meeting between trump and Xi until then all eyes on the news
Last week, my FOMC colleagues and I held our regular meeting to assess the stance of monetary policy. We did not change the setting for our main policy tool, the target range for the federal funds rate, but we did make significant changes in our policy statement. Since the beginning of the year, we had been taking a patient stance toward assessing the need for any policy change. We now state that the Committee will closely monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion, with a strong labor market and inflation near its symmetric 2 percent objective.
The question my colleagues and I are grappling with is whether these uncertainties will continue to weigh on the outlook and thus call for additional policy accommodation. Many FOMC participants judge that the case for somewhat more accommodative policy has strengthened. But we are also mindful that monetary policy should not overreact to any individual data point or short-term swing in sentiment. Doing so would risk adding even more uncertainty to the outlook. We will closely monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion.
Something we all know by now but any who lets take a look at the Change in the market implied policy rates from 1-month ago vs. today for The Fed. This Bloomberg function puts into graphical form the change across tenors and shows a big adjustment from 1 month ago.
Another labor market monitor can be found in the Consumer confidence report ,it is the Diff between jobs plentiful and hard to get.Below is graph and at 6 month Moving average,Make your own observations on what this may portend