6-25

Market action of note:

  • JPY -.4%
  • 30-year Buxl yield -~4bps
  • Dollar index +.45%, yesterday Closed +.5%

News:

Illinois: Coronavirus 7-day case rate up 3% vs. 2% a day ago

Plenty of news regarding banks today so let us watch not just the big boys but also the smaller players…. Big day for big banks — Bank regulators this morning will reveal the final details of two major rollbacks that Wall Street has been seeking for years. One would scale back investment restrictions under the so-called Volcker Rule. The other would relax rules around internal derivatives trades that banks set up across their affiliates. Then later in the afternoon the Federal Reserve will shed light on the health of the big banks when it releases annual stress test results. -Politico   Yesterday BKX Bank Index down over 4%

 Continued Virus worries  the driver of sentiment the last two days this from twitter showing you they these are front and center …@carlquintanilla The #Covid19 surge leads page one in Kansas City, Miami, San Francisco, Houston.

  • Nevada Gov: signs order requiring face masks be worn in public from tomorow
  • -Texas Gov: a massive C-19 outbreak is sweeping the state; new cases set daily record +4.6%  , hospitalizations +7.3% https://bloom.bg/31iL1sf
  • -Houston (overnight news): on track to exceed ICU capacity by today
  • -BBC (overnight news):  NY, New Jersey & Connecticut have asked travelers from states where C-19 numbers are increasing to go into self-isolation for 14 days; these states include Texas, Alabama, Florida, Utah, N & S Carolina, Arkansas & Arizona

A nice break yesterday in the Teflon Don Spoos but let us see if it can repeat today. From mizuho this  may prevent this from happening Dry powder earning a very negative real interest rate…”Assets in money-market mutual funds are still at a near-record $4.68 trillion, after soaring from $3.7 trillion in early March as the spreading virus battered stocks. At its peak, more than three-quarters of that was parked in Treasury-only”. Will this in fact Limit the downside Time will tell.

 Long end German yields having a nice day the reason is that per IFR news as that yesterday 100-year Austrian bond Auction left some hedges open so thus buying in long end Germany to cover them. Ultras +2 handles and bonds higher by 20+ ticks… You Know the drill Stronger Dollar Lower commodities Nat Gas A Stones throw from multi year lows. Spoos traded below yesterday’s lows earlier this morning lets see if Downside is in play today. Traders need Nasdaq to break and that likely will bring down the house of cards.

News: From ITC Markets

Trade

-FT: EU warns the US their threat of tariffs on $3.1b of Euro products is very damaging & will harm both sides https://on.ft.com/37ZQNjP

–Sources: The Indian gvt are contemplating stricter rules & tariffs on 372 Chinese products

Oil/Geopolitics

  • -FBI Director Wray (Fox): China is conducting IPO theft & cyber intrusion in the US; there is insufficient info to know how the virus started from Wuhan
  • -Axios: the US defense Dept is making public a list of Chinese firms that operate in the US that are tied to Chinese military; the firms inc Huawei, Hangzhou Hikvision, China railway Construction, China Telecoms Corp https://bit.ly/3hZjrWO
  • -Pres Trump: Will only be satisfied when all NATO countries are paying their fair share; looking fwd. to signing a defense co-operation agreement with Poland; sends a strong signal to Russia; we expect to get along with Russia; doing very well on work on agreeing an arms control agreement with Russia
  • -NYC: Expands open streets program with 23 more miles
  • -Ana Swanson: Lighthizer was asked whether the US can really decouple from China, he says “I don’t want to speculate.” He emphasizes China is a huge potential and current ag market, and that the trade deal is opening barriers for a lot of new U.S. facilities to ship to China.
  • support is needed; would be surprised if Fed adopted negative rates; need more fiscal especially for local and state gvts
  • -GS: initial recovery expects to be V shaped after that initial v recovery will take a while
  • -Marquette: Biden has widened lead over Trump in Wisconsin
  • piq @priapusiqExclusive – Pentagon clears for publication list of Chinese companies owned or controlled by China’s military; pentagon designation includes China’s Huawei, Hikvision, China Mobile and other China Telecoms – document seen by Reuters; Pentagon designation lays the groundwork for further U.S. financial sanctions – Source

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