6-24

*AUSTRIA’S 100-YEAR BOND SALE GETS RECORD 13 BLN EUROS OF BIDS 
(DJ) *Guidance on Austria’s 100-Year Bond Revised to 0.90% Yield
 Area, +/-0.02%   Why would anyone buy this ??From Mizuho

   Huge demand from investors because the bond: 1. can be purchased by the ECB under any of its QE programs 2. eligible to be posted as collateral for repo 3. counts as a “High Quality Liquid Asset” (HQLA) for a bank’s Liquidity Coverage Ratio (LCR) 4. duration grab continues, as conventional wisdom holds that central bank QE initially leads to disinflation from malinvestment (“zombification”). Fund managers who bought and held Austria’s 100-year 2.1% issuance three years ago would have made a total return of 86% through Tuesday — or nearly double their money, a stunning annualized return of almost 25%.

REMINDER: China is now closed until Monday in observation of the Dragon Boat festival holiday

Some Negative News:

  • “U.S. Targets $3.1 Billion of EU, U.K. Imports for New Tariffs -DJN is in retaliation to this E.U. May Bar American Travelers as It Reopens Borders, Citing Failures on Virus’?
  • Weekly Mortgage Applications -8%, but still trending higher   
  • Bloomberg-Infected passengers arrived in Hong Kong   From Dubai, Kuala Lumpur in recent days Underscoring the risks of reopening Boarders
  • New Zealand’s Central Bank, RBNZ flagged up that the Currency’s recent appreciation is placing pressure on Export earnings (BBG)-beggar thy Neighbor policy Kiwi -.5 vs Dollar
  • IMF to downgrade Global growth from a an already Dire forecast later today
  • -Global Times(overnight): Navarro’s clarification can’t undo damage to phase 1 trade deal https://bit.ly/3fVk2r0
  • China’s soybean buyers are asking exporters to sign a letter guaranteeing their cargoes are not contaminated with the novel coronavirus, U.S., Brazilian and Canadian soy industry officials said on Tuesday

Good News:

  • German IFO beat on Business Climate and Expectations but Missed on current assessment
  • Dr Fauci: Cautiously optimistic to have vaccine widely available for everyone by the    beginning of 2021; One vaccine is entering phase 3 trials in Jul there are several vaccines showing promise; Never told to slow down testing; next 2 weeks very important in addressing spike in cases; cautiously optimistic on vaccine  
  • WSJ: India and China reach accord to diffuse border tensions
  • v  Looks Like Baseball will be back

 Spoos Lower _.7%, Nasdaq -.4%     Europe ugly Stoxx 50 -1.8%, Uk Ftse -2.2%, Dax -1.9%    all 19 Stoxx 600 sectors lower led by travel -3% Not a surprise with Travel restrictions looming, Autos -2.6% and banks -2%. But like Spx Stoxx 50 stuck in a sideways range for last 7 days 3158-3286…  Stocks Lower Yields higher hmmm  Not treasuries who are trading lower but also Europe and  US 5 year auction at noon …Dollar a touch higher  trading within yesterdays range   …lets watch Gold as it attempts to take  out the psychological $1800 level and LME copper as it attempts to take out  $6000..  Silver -1.5%, Platinum -3%

Almost all markets sideways choppy here the last 2 weeks No one it appears wants to make a substantial bet one way or the other. Possibly waiting for Month end/Quarter end Post July 4th to take things seriously again? Maybe ….VIx staying above 30 still indicates some angst out there

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