Morning Briefing July 25 th 2016

Transcription

1 A Eurex publication focused on European financial markets, produced by MNl Morning Briefing July 25 th 2016 Monday sees a quiet start to the week, with a limited data calendar on both sides of the Atlantic. The European calendar gets underway at 0600GMT, with the publication of the German June construction orders. The main release is expected at 0800GMT, when the German July IFO index is set for publication. At 0830GMT, the Bank of England is set to publish the quarterly Asset Purchase facility report. In the UK, the only release scheduled comes at 1000GMT, when the CBI July Industrial Trends Survey data crosses the wire. At 1340GMT, the ECB will call for bids on Tuesday's 7-day MRO. At 1350GMT, the central bank will publish the latest PSPP bond-buying data. The only US data set for publication comes at 1430GMT, as the Dallas Fed July manufacturing survey is published. Monday morning sees Germany issue a new 12-month Jul 26, 2017 Bubill for up to E1.5bln. In the afternoon, France tap 3-month Oct 19, 2016 BTF for between E3.2bln- E3.6bln, tap 6-month Dec 21, 2016 BTF for between E600mln-E1.0bln and issue a new 12-month Jul 19, 2017 BTF for between E800bln- E1.2bln. T-bill redemptions this week are due from France for E7.462bln, Germany fore1.5bln, Italy for 6.5bln and the Netherlands for E4.65bln leaves net cash flow negative to the tune of E6.6bln versus +E4.83bln last week.. Global Economic Trading Calendar

2 Markets FOREX: It was an unobtrusive start to the new trading week in the Asia- Pacific region, broad-based dollar strength seen in New York on Friday, carried over into Asia and the greenback managed to eke out a few fresh highs along the way. Tokyo-fix related demand saw dollar-yen higher, the pair holding a Y to Y range and was last at Y Euro-dollar edge lower from $ to $ before meeting demand to bounce back to around $ Meanwhile, Aussiedollar was in consolidation mode, holding a tight $ to $ range, the focus is clearly on Wednesday's Q2 CPI, which should give us a clearer picture on the Reserve Bank's OCR intensions. Aussie-dollar was last at $ US INDEX FUTURES: US stock index futures are trading slightly higher, following the lead from the Nikkei. Currently the Sep'16 e-mini S&P futures are trading up 1.50 points at 2,169.00, the Sep'16 e-mini Nasdaq futures are trading up 3.50 points at 4,660.75, while the Sep'16 e-mini Dow futures are trading up 16 points at 18,494. US STOCKS CLOSE: While other asset classes remained rangy and or saw profit-taking, U.S. stocks firmed further Friday. The DJIA closed up 0.29% at 18,570.85, the Nasdaq Composite closed up 0.52% at 5, and the S&P 500 closed up 0.46% at 2, Wednesday, the DJIA and S&P 500 posted new life-time highs of 18, and 2, Earlier, the Nasdaq Composite posted a high of 5, , the highest level since Dec 29, 2015 (5, high). The life-time Nasdaq high was 5, , seen July 20, At Friday's close (life-time high close), the S&P 500 was up 6.4% ytd. BOA Merrill Lynch's monthly fund managers survey, taken July 8-14 and released this week, showed that a net 9% of PMs were overweight U.S. stocks in July, the first such overweight in 17 months. This compared to a net 15% UW in June and a net 18% UW in May. The turnabout in U.S. stock holdings helps to explain the solid run-up in U.S. stocks in the post Brexit environment. From the post Brexit low of 1, to Friday's close, the S&P 500 has risen 9.2%. US TSYS: It's been a very slow start to the week for cash treasuries, with market the only seeing some ~$1bln change hands. The market is trading slightly lower, on slight risk on trade with the curve flattening slightly as 2's under perform. Ten-year futures have eased 3-ticks on lackluster volumes of 38k and are currently last at JAPAN STOCKS: Japanese stocks have posted slight gains as the market trades with a small risk on bid, with the Yen weakening. Nintendo shares plunged after the company said late Friday the financial impact from Pokemon Go will be limited, Bloomberg reported, with the stock down as much as 17%. The Nikkei has closed for lunch up 0.38% or points at 16,690.60, while the Topix is up 0.35% or 4.60 points at 1, GOLD: Spot gold last down $5.35 at $ per ounce, in a $ to $ range so far this morning in Asia, with a slight risk on bid seeing the Usd strengthen against the yen and hence pressuring Gold. Late Friday saw gold firm on the reported shootings in Munich yesterday that saw gold climb to a good $1,330 per troy ounce. Gold in euro terms regained the E1,200 per troy ounce mark. As the data from the Swiss Federal Customs Administration show, Switzerland exported more gold to Asia again in June. Commerzbank notes that exports to Hong Kong in particular grew sharply, soaring by nearly 50% month-on-month to 35.8 tons. Exports to China remained virtually unchanged at the previous month's level, while exports to India picked up somewhat. Last month, Switzerland's combined exports to Hong Kong, China and India totaled 75 tons. Commerzbank says that "this was the highest volume since January and points to reviving gold demand in Asia". Gold support is seen at $1,310 while resistance is seen at $1,335. OIL: WTI crude oil futures for Sep'16 delivery are trading down $0.01 at $44.18 per barrel, after a $44.37 to $44.03 range in Asia today, with the market lacking fresh leads for direction. Friday saw WTI post fresh lows in the wake of the Baker Hughes data, released Friday afternoon, showing an increase of 14 new rigs to 371 rigs for US "oil only" rigs in the week ending July 22. This compared to 659 rigs a year-ago and was down 76.9% from the peak rig count of 1,609 rigs seen October 10, Short-term support is seen at $43.81, while $44.73 offers resistance...

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