Morning Market Report
Following up on the futures action last night Global bonds retreated on Monday (although losses were pared) as the U.S. and China agreed to restart trade talks.
As a result gold was being dropped on the NY GLOBEX open last night. Taken down below $1400 (paper contracts-remember this!) and as long as it stays above $1350 it should meander around.
As mentioned last night, and few times during as it rose, the rise from $1300-$1350 had poor volume so there is not much support resting there and the price could easily return to sub $1300 quickly.
Stocks are jumping while global PMI (Purchasing Manager Index) continued plumbing new cycle lows, and after both Chinese manufacturing surveys missed expectations, printing in contraction just below 50.
We are not immune to this either, that is the reality of removing globalism from our system, going to be some bumps and opps as well.
You short sellers must enjoy pain-you are actually assisting the rise as each time you cover it only makes prices on equity's rise…have you not heard the news in here?
Ironically, the S&P may hit 3,000 on the day the ISM dips below 50 (expectations for the Mfg ISM is for a 51.0 print).
The ANALysts are going out of the way to say the FRB is being too aggresive with rate cut expectations, while failing to mention why it needs to be be done. Fuck…these idiots get paid rather well too. I would have fired the lot of them when they missed the big clue at the prior FOMC meeting when the Fed discount rate was lowered. Know you saw it but when your bread is buttered by the system….spergs.
In commodities, oil prices sprang higher on news OPEC and its allies look set to extend supply cuts at least until the end of 2019 as Iraq joined top producers Saudi Arabia and Russia in endorsing the policy.
Brent crude futures rose $1.85 or 2.8% to $66.40, while U.S. crude gained $1.84 or 2.75% to $59.90 a barrel.
Elsewhere, Gold (-1.3%) is suffering due to a firmer USD and a safe-haven unwind, as are other havens including JPY and CHF, with the yellow metal giving up the USD 1400/oz handle after this weekend's positive trade/geopolitical developments;
having printed a session low of USD 1381/oz after the metals largest intraday fall for a year. Do not get infatuated with daily price moves if you have physical-you have it and all that counts.
ECB May Cut Rates by 20bps, Restart QE in September: Goldman.
US Event Calendar-data times EST
9:45am: Markit US Manufacturing PMI, est. 50.1, prior 50.1
10am: ISM Manufacturing, est. 51, prior 52.1; ISM Employment, prior 53.7; ISM New Orders, est. 52.5, prior 52.7
10am: Construction Spending MoM, est. 0.0%, prior 0.0%
As for this week, US Independence Day on Thursday will break up the week and activity with US bond and equity markets closing at half time Wednesday and all of Thursday.
However we do have some important data including the remainder of today’s global manufacturing PMIs/US ISM, Wednesday’s services equivalent, and Friday’s US employment report which will be important as evidence starts to slowly build of a softening of the strong US labour market. Consensus is at +158k vs +78k last month. The weekend truce will take the edge of any weak numbers in today’s PMIs with hopes that business confidence can slowly start to rebuild again with the caveat that the truce could break at any time. The rest of the week ahead is at the end today.
Some Headlines
Walmart to invest $1.2 billion in China over the next 10 years to upgrade logistics
https://www.reuters.com/article/us-walmart-china/walmart-to-invest-1-2-billion-in-china-over-the-next-10-years-to-upgrade-logistics-idUSKCN1TW2F5
really nigga?-guess we know why you've been selling all that stock, take it away from you before you blow it over there.
Russia cut oil output by 278,000 bpd in June: Ifax
https://www.reuters.com/article/us-oil-opec-russia-june/russia-cut-oil-output-by-278000-bpd-in-june-ifax-idUSKCN1TW2KE?
Deutsche Bank Credit Risk Tumbles as Sewing Pursues Timely Cuts
https://www.bloomberg.com//news/articles/2019-07-01/deutsche-bank-credit-risk-tumbles-as-sewing-pursues-timely-cuts?
take this with a HUGE dose of skepticism-don't believe this one bit even though the data show it. Would be very easy to just pring up a few billion and through it at the CDO market to 'generate' this result-calling total bullshit here.
https://www.kitco.com/charts/livegold.html
https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html/
https://www.bloomberg.com/markets/stocks/futures
https://www.marketwatch.com/investing/bond/tmubmusd10y?countrycode=bx
https://www.dailyfx.com/crude-oil
some raw sentences taken here but not much-use it to get oriented in morning
https://www.zerohedge.com/news/2019-07-01/global-stocks-soar-trade-truce-other-assets-get-cold-feet?