Morning 8-11

U.S. 10-year real rates Bouncing +6% last 5 days

AS are 5-year real rates but not to same extent +2.4% last 5 days

   The performance of real yield is one of the reasons that both gold and Silver taken out to wood shed this morning  Gold -2.5% Silver -5.4%( Goldman Says it has closed out it long silver trade) most recent highs in Silver 29.915  has  been tested but not breached. Take notice Dollar down on day

 Another reason precious metals being sold is a bit of Economic optimism this morning out of Europe  “The ZEW Indicator of Economic Sentiment for Germany jumped by another 12.2 points from the previous month to 71.5 in August 2020, the highest since January 2004 and well above market expectations of 58.0. Hopes for a speedy economic recovery continued to grow after the EU reached in July an agreement on a massive stimulus package. “Trading economics

 All 19 Stoxx 600 sectors higher led by autos, oil   both>4% then Banks +3.66% Dax And Stoxx 50 +2.5% MIB +2.9% Europe well bid by U.S. Futures giving back all her gains and then some Naps little changed. Spoos +.5% Russell outperforming again though +1.1% …. SPX  working on an 8th Consecutive higher close the longest run in a few month.  European rebound continues to advance quicker than the U.S thus outperformance dax & Stoxx

 Treasury’s lower remember a record amount of   long end coupons  to be sold this week this is the key reason why Long end week today we see a hefty 3 year auction it should be well received but I will monitor Bid to cover ….Via  Bloomberg  (BN) The Flood of Long-End Treasuries May Just Be Getting  Started  This week’s 10-year auction, at $38 billion, is $6 billion      larger than the equivalent sale three months ago, while the     30-year offering is rising $4 billion over the previous quarter to $26 billion. The 20-year note sale for August — which takes place next week — is $5 billion larger, at $25 billion     Bunds -721 ticks                                                    
                                                                    

Stimulus deal far out of reach… another reason for the selloff in Gold???

Via Politico Money No deal soon —” MM spoke with a couple of senior administration officials who both said they see little chance a fiscal stimulus deal comes anytime soon. There are not likely to be any serious talks this week, partly because White House chief of staff Mark Meadows is out for the week but mostly because the administration feels confident they have the upper hand politically following President Donald Trump’s executive actions (more on which below).     One official said the White House feels it has Democrats in a “real pickle” and if they try and block the executive actions, they will look like they are trying to hurt people. This person said that simply splitting the difference on the overall price tag of a deal is not likely to fly. “

  Besides Strong Europe Econ data  Optimism  shines brighter then pessimism regarding Covid  Russia says it is close to a vaccine  oh okay , the number of confirmed stateside cases has taken a dramatic turn for the better dropping yesterday to 42k from a trailing average of above 50k a day. This 20% drop is the lowest since late June. One day does not make a trend if the news is nonetheless most welcome. (IFR News)

ECO Data:

Small Business optimism index 98.8 vs 100.5 expected PPI at 7 :30 showed a touch mor inflation at producer level

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