Morning 6-5

A few things:

 Dollar index working on its biggest 2-week sell off in 8 years (lower dollar=Risk on)

Oil working on 6th consecutive weekly gain (OPEC + scheduled to meet tomorrow to be extended cuts)

This Week Germany Announced $147 B stimulus package and ECB surprised markets with an additional 600 B Euros of Bond buying a Hefty dose of Stimulus

Bloomberg Quantitative hedge funds are being partly blamed for the biggest selloff in Treasuries in seven months. Funds known as Commodity Trading Advisors – synonymous with trend-following quant strategies — have likely been actively shedding large long positions in 10-year bond futures, according to market watchers. These systematic accounts tend to be secretive with their strategies, leaving a puzzle for analysts to estimate positioning. The large volumes traded in futures after the 10-yearTreasury yields broke above 0.69% this week suggested an unwind of CTA long positioning, Citigroup Inc. strategists Bill O’Donnell and Ed Acton wrote in a note. CTAs have been long for all 2020…A break outside of sideways range in Yields a big reason for long liquidation

US 5-30 yield curve steepest since Dec 2016, Today Curve steeper by 3.9 bps 2s 30 steeper by 5.6 bps widest levels since Aug 2017 Bonds down over a handle today Why??  from IFR news” The Fed’s large-scale purchases of UST/MBS near single handedly was responsible for bringing term yields to their record low levels. Is it really a surprise that term rates are shooting higher now that the Fed’s purchases have fallen to a relative trickle? No. And especially as the supply of duration, from both Treasury and corporate America is meaningfully being ramped up. This consideration really is one of supply and demand. It matters and especially in the harder to place long-end of the curve.”

After experiencing epic outflows, rolling 1m flows into TIPS have surged, showing inflation protection is back in favor @Data Arbor

Bloomberg-Gold investors in exchange-traded funds have finally trimmed their holdings. The amount of the precious metal held in bullion-backed ETFs tracked by Bloomberg has fallen for the first time in 30 trading days, ending one of the longest stretches of consecutive daily increases on record

Payroll Data:

   Todays Data per experts likely to be the low point in the cycle, (let us Hope) The guesstimates for jobless are wide so might as well just throw a dart and hope for the best. I will be watching the average hourly earnings data, which surprised to the upside last month. The surprise was due to the fact the low paying jobs dropped out of equation, which likely may happen again today regardless Markets did respond. Unemployment rate expected to touch 19% but markets have priced in all the negative news and are almost immune to anything bad as evident by the Nasdaq touching an all-time high yesterday. markets are looking forward this data is Looking Backwards.

Markets:

 Soybeans on a nice run higher breaking out of sideways range, Lower Dollar has caused US Soybeans to be the cheapest on the World stage and China is continuing to Buy beans via private companies. Soybeans +~5% so far this week and yesterday’s Up Volume was a contract high as some shorts cover positions. Just As a note Rice traded on CBOT has gained some 40% over last 8 trading days or so, yesterday Locked Limit up, today trading lock limit down. White house Lighthizer” says he feels optimistic about phase one deal” (pro farmer) Cl, Brent Gasoline all +3% Gold -1.4% Silver -1.8% Stoxx 50 +1.9%,Dax +1.7 Mib +1.5% bunds -30 ticks

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