Waiting game for markets as we look towards Powell speech on Friday
Stock markets sideways, Bunds, 10s Bonds finding some buyers overnight and Dollar continues with slow and steady climb towards the 2019 Highs of 98.932 in Spot Dollar index. Handful of Rumors floating around about some type of new Fiscal stimulus being discussed by Trump administration, a payroll tax cut seems to be getting the most headlines; White House has denied such talks are underway. Home depot earnings this morning stock +1%, Lumber deflation is a term that caught my attention as HD said low selling prices hurt its bottom line. Kohl’s out with earning this morning ,They missed sale estimates but Stock +~5% as I type, good news for retail stocks good news for broader market. A new or Updated Volcker rule to be released today, some changes, lower bank compliance burdens and hopefully an Increase in market making volume , proprietary trading still banned but banks may be able to increase transactions volumes so long as they don’t exceed internal-risk Limits(Bloomberg). China’s new target lending rate landed with a dud last night as rate was a bit higher then market thought.
Some other news:
- A UK consulate worker detained in China
- U.S. threatens those assisting Released Iran Oil tanker
- Australian central bank said they are ready to Cut rates if Evidence suggests
- China Money says US-China will talk this week
- SCMP says China will not make trade concessions if U.S. Plays Hong Kong card
- From WSJ “U.S. apparel companies are bracing for squeezed profits and potential store closures as a result of the Trump administration’s pledge to extend tariffs on Chinese imports, Esther Fung and Inti Pacheco report.
European 10 and 30 year yields lower bunds -4.5 Bps, Buxl -3.5. U.S. yields down between 3-4 Bps across the curve. Gold steady Spoos, Dax and Stoxx 50 little changed, Copper -.6% Oil unchanged but grains on the Bid Corn +1.3% and Beans +.85. Currently 23% chance of 50 bps cut at next fed meeting down from 42% on Fridays close