Morning 7-9

Chart from Bloomberg 60 day correlation SPX and Dollar lowest in 8 years or another way Inverse correlation is strongest in 8 years. Lower Dollar=Risk On

China:

 Shanghai Stocks closed +1.39% Csi 300 +1.4% 

 Alibaba surged 10% in Hong Kong to close at a record high of HK$261.60. That brings its market cap to nearly HK$5.614 trillion (US$720 billion), more than Facebook’s US$694.53 billion. QuantumCTek, a Chinese manufacturer and wholesaler of communications equipment, surges 1000% in its debut on STAR Market in Shanghai. QuantumCTec raised 723.6 mln yuan in the deal and its IPO was 2,839 times oversubscribed-Mizuho

The yuan trading below 7 handles stronger for the 6th consecutive day trading at highest level since Mid-March

EEM Emerging markets ETF above the 200 d MA for a few days now trading at highest levels Since 2-20

Markets and Data

 Japanese data released  yesterday evening, Money supply and machine orders better   then expected caused a small bid in yen, 30 year JGB yield lower overnight by 1.6Bps touching a 1 month low. German trade data for May worse then expected but Old news Euro Above resistance 0f 1.1355 next up 1.1422  I would think Dollar would be lower  but stands Little changed. Strong Earnings from SAP, Stock +7% pushing Dax and European tech sector (+2%) Higher. Spoos steady Nasdaq +.3%, Gold steady   but a small bounce in the Q-Z spread after a big volume down day yesterday, after 8 straight declines. Copper f tailwinds from Chinas Stock market +1.6%, Silver +.7% and palladium +2.3. Nat Gas +3% and grains higher both due to Hot weather

  Less the optimistic comments regarding recovery from Fed and ECB Lagarde ,worries that bounce in Economic data is over   keeps a bid Treasuries yesterdays 10 year auction at record low yields  is just more evidence. News flow of late not optimist either

News:

  • China SAFE Spox: decline in value of USD is one of the factors that has seen China increasing its FX reserves
  • -BOJ’s Kuroda: won’t hesitate to ease further if its needed, economy is in a severe state & likely to remain so; Japan’s fin system is stable, he is watching impact of virus
  • -BOJ report: cuts assessment of all 9 regions, all of Japan’s regional economies are worsening or in a severe state
  • US daily virus cases (RTRS Tally): >60k, new record daily high
  • Aus. Govt: advises Aus citizens in Hong Kong may be at increased risk of detention on vaguely defined national sec grounds, govt is advising against travel to HK
  • US state with 40% of US population put reopening plans on hold-Goldman
  • United extended its suspension of flights to and from HK-BBG
  • Walgreens cutting 4k jobs
  • US daily virus cases (RTRS Tally): >60k, new record daily high
  • Texas: +9979 new cases to total of 220564, biggest daily rise; hospitalizations at record high of 9610

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