The tug of War between Central bank stimulus and the Virus continues today
A very Busy week of data compressed into 4 trading days, Payrolls, ISM, Chicago PMI FOMC minutes, comment from Chairman Powell and Quarter End. Add to this Scheduled data release is daily updates on the Virus on paper this could be a volatile week. Also, EZ inflation data to be released and if it is not lower than last month might be seen as a small positive for the Euro. German Cpi to be released today and so far, Individual German states are reporting slightly higher than expected numbers.
For Spoos and Stoxx both gapped open lower but since have trended higher in choppy fashion .Spoos +15 handles, Stoxx +.5% Dax +.7% banks leading the wat higher +1.5% as a sector, A speech over the weekend from the ECB’s Schnabel drove home the point that ECB is not looking to cut rates further as they do not want to harm saver and that cheap loans is the way to go. This is the main reason for the strength in banks so far today.
The US appears to be taking a meaningful step backwards in trying to flatten out the Covid-19 pandemic. Indeed, 33 states are currently experiencing a rise in the number of new cases with the sunbelt states of Florida and Texas (two of the nation’s largest populated states) seeing an exponential rise in cases. The good news is that even with this surge in confirmed cases the number of new deaths continues to fall on a percentage basis.
- China’s Industrial profits rose 6% in May the first increase this year
- German CPI day did beat expectations
- 2 fracking companies have filled for Bankruptcy over weekend lilis Energy & Chesapeake Energy
- A Massive short covering in Spoos last week as speculators tapped out of there short play-BBG
- Face book continues to see advertisers flee
- Regulators have approved of Boeing of test flights for Boeing 737-BBg
- The economic sentiment indicator in the Euro Area rose by 8.2 points to 75.7 in June, recovering further from an 11-year low of 64.9 hit in April as countries across the region continued to reopen their economies following weeks of lockdowns. Still, the index came well below market expectations of 80.
- PBOC pledges stronger fiscal and Monetary Support
- Current Predict It odds put Biden at 62% of winning US election in Nov from a low of 4% in Feb while Trump sits at 38% down from a high of 57% in Feb.
- ◘ The Fed on Sunday identified 794 companies whose bonds it will be buying directly to support the market for investment-grade corporate debt. Automakers, Technology Firms Are Largest Components of Fed’s Corporate-Bond Purchases – WSJ
- Hedge funds’ net longs in the e-mini Russell 2000 index futures fell 35.7% to a 65-week low. Currently net long 5.7k, down 3.2k. Large speculators net longs in gold futures rose 123% to an 8-week high. Currently net long 252k, up 27.6k. Fixed Income. Large specs switched to net long in 10-year note futures. Currently net long 6.5k, up 17.4k. Large specs net shorts in the 30-year bond rose 1.5%. Currently net short 73.4k, up 1.1k.-Mizuho
Markets Dollar down Gold and Silver down hmmm.Bunds and bonds show yields a touch higher NKY closed down >2%.nat gas after touching a 25 year bouncing a bit today +4% above normal tempos are forecast for next 2 weeks it can’t hurt prices Oil +1% just making new session highs over last 30 minutes or so/Platinum and palladium both higher and Copper with some help due to production shutdown in Chile due to the virus continues to move higher smartly.