Morning 9-24

A few items causing a subtle risk on move in Stocks:

  • US Treasury Secretary Steven Mnuchin said in an interview with Fox Business Network that US-China trade talks were set to resume in two weeks, and that the  Vice premier is headed to Washington in 2 weeks’ time. China also bought a few cargoes of U.S. beans to help with trade tensions.
  • The U.K. Supreme court ruled that Prime Minister Johnsons Suspension of parliament was Unlawful; this means lawmakers can reconvene; this is a blow to Johnson Brexit plan and possibly his role as PM. GBP rallied on the news gilts sold off.

 Bunds off a handful of tick’s treasuries steady as today starts the $113 B in treasury auctions of 2, 5, and 7s.Also markets waiting to see the results of the Overnight repo operation and the first 14-day repo from the Fed results should be published within the hour. Spoos + nine handles, NASDAQ +26. European Stocks Mixed as more Legal worries for Volkswagen weigh on stock -2.77% and dragging the Auto sector lower. In the commodity space oil -1% as Saudi Says production to be back to normal sooner rather than later, Nickel -2% and Nat Gas +1%. Dollar sideways to lower.

Results are in for the First 14 day repo from the Fed and not good, in the sense that demand was higher for Funds offered indicating a need for more liquidity.

Today’s 14 day Term repurchase operation garnered $62 bn in demand for $30 bn offered. The breakdown of operation was as follows:

  • *Treasuries $22.732bn at an average of 1.961
  • *Mortgage-backed $7.268bn at an average rate of 2.007%

Calendar:

  • 9:00 Consumer confidence
  • 9:15 President Trump speaks to the U.N. He will discuss Iran. The president will have ample opportunity to makes comments today as he spends the majority of it at The United nations.

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