Two main reasons for strength in Stocks and risk and weakness in U.S. Treasuries
- (BN) *GERMANY PREPARING STIMULUS MEASURES AS CONTINGENCY
CRISIS *GERMANY STIMULUS TO TARGET JOB CREATION, DOMESTIC MARKET
- China’s Central Bank has changed the way banks set lending rates, linking the loan prime rate to its medium term rate so it can directly move borrowing rates for companies (BN) a way to provide stimulus/ rate cuts in a new manner.
Other News driving flows:
Treasury floating the idea of 50 and 100 year bonds this weighing on ling end as Ultras -3 handles at one point down greater then four, Bonds -1.5 handles off worst levels of day. Yields show 30s +5.3Bps,10s +4.6 Bps and 2s +3.4 A steeper yield curve 2s-10s +1.18 trading at positive 8.5. Bunds -35 ticks yields +3bps Buxl -260 Yields +6 bps All Eurozone bond yields higher today
U.S. will ease sanctions on Huawei for an additional 90 days. Stocks in China closed higher Shanghai +2.1%, CSI 300 +2.27% Hong Kong +2.17%. In Europe Dax +1.5%,Italy’s Mib +1.7% All 19 stoxx 600 sectors higher, Spoos +1% Nasdaq +1.2%, Copper +.85%, CL +.5%. Hard pressed to find a stock market down on day. Gold down 1% as the flight away from safety weighs on prices.
Grains down on day as Demand and Weather paint a bearish picture. Today starts the pro-farmer crop tour where Crop updates will happen daily a bit of volatility likely in the grain complex. China Hog herd down some 32% in July versus year ago levels.
Economic calendar light this week, the highlight will be Chairman Powell Speech on Friday morning. In Europe PMIs released Thursday morning and a good report may squash the Fiscal stimulus talk