Gold 1month 25D Risk Reversal highest since 7th Jan (orange)
Archives of “June 2019” month
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World Bank lowers its global growth forecast for 2019 to 2.6% (from 2.9%)
Forecasts from the World Bank slashed, they are citing the impacts of trade wars.
Media statement:
- There’s been a tumble in business confidence
- a deepening slowdown in global trade
- and sluggish investment in emerging and developing economies
This is worrisome because subdued investment weakens the foundations for sustained growth.
The previous growth forecast from the bank was in January, a sluggish 2.9%
- this June update is worse at 2.6%
- All six global regions, East Asia and the Pacific; Europe and Central Asia; Latin America and the Caribbean; Middle East and North Africa; South Asia; and sub-Saharan Africa have lower forecasts.
Oh, and the forecasts do not incorporate US threats to up tariffs on China to 25% nor last week’s threats of up to 25% tariffs on Mexico. Awesome.
More:
- global economy’s growth will be the weakest since 2016
- trade growth on track to be the weakest since the GFC
- other factors – financial market stresses, suboptimal business environments in many countries, and economies that were already slowing because of cyclical factors
Meanwhile, we get policy makers expressing the four letter word (hope).
Oil – private data shows a surprise build in headline inventory
The private survey data ahead of official figures due for release tomorrow morning (US time)
Via Twitter:
The Reuters survey I posted on earlier had an expected draw of 800k barrels for the week.
Three things to watch in this week’s ECB – Nomura
What to watch out for in this week’s ECB meeting
Nomura Research discusses its expectations around this week’s ECB June policy meeting on Thursday.
“Our economists outlined in their preview 1) a possible decision on the introduction of a tiering system, 2) TLTRO details and 3) a forecast update, will be major focuses at this week’s meeting. The ECB has already committed to keep its low rate unchanged at least until end-2019, and amid fragile risk sentiment, the ECB’s decisions may not change the mid-term EUR trend, in our view. Nonetheless, the Bank’s decisions can have different implications on EUR-crosses,” Nomura
EUR’s reactions against USD and JPY will likely be muted though, as movements in yields and risk sentiment can work in opposite directions for these crosses. Thus, we believe EUR trades against the commodity and Scandinavian currencies would be better trades into the ECB meeting in G10 space. If the ECB wants to avoid more proper easing measures, such as the restart of QE and deeper negative rates, at a later stage, the Bank may want to avoid a major disappointment from an announcement on TLTRO’s details.
Then, TLTRO conditions could be generous, and we believe tactical EUR/SEK short positions remain attract.. We also maintain our CAD/NOK short and EUR/GBP long exposure,” Nomura adds.
US stocks finish at the highs in biggest rally in five months
US stocks rally 2%
- S&P 500 up 59 points (or 2.1%) to 2803
- Nasdaq up 2.7%
- DJIA up 2.1%
- Toronto TSX up 0.8%
Is this the start of a turnaround or a dead-cat bounce? Who knows but that’s a big rally. The index erased a week of declines in a single day. I think the optimistic comments about getting a deal from Lopez-Obrador were the main driver but the market also liked a slight dovish slant from Powell.
Technically, the S&P 500 reclaimed the 200-day moving average, the late-March low and the May low… all in one day.
Thought For A Day
European shares end the day with mixed gains (but gains)
US stocks or near session highs.
The European shares are closing the day with solid gains. There is less trade worries today and short/hedges are being squeezed a bit.
The closes are showing:
- German DAX, +1.5%
- France’s CAC, +0.5%
- UK’s FTSE, +0.4%
- Spain’s Ibex, +1.1%
- Italy’s FTSE MIB, +1.7%
The US stock market is also positive today and near session highs as London/European traders look to exit:
- S&P index +44.14 points or 1.61% at 2788.60. The price moved back above its 200 day moving average at 2774. The 100 day moving average is currently at 2800.
- Nasdaq is up 150 points or 2.05% at 7483.40. It remains below its 200 day moving average at 7519.39.
- The Dow is up 427 points or 1.71% 25244.
In the European debt markets, the benchmark 10 year yields are ending mostly lower but off the lowest levels (UK yields moved higher today).
In the forex market, the AUD is now the strongest currency. The GBP was the strongest at the start of the day. The JPY is the weakest (on the back of higher stocks basically). For the USD, the sum of the % gains (EUR, JPY and CHF) and the % losers today (GBP, CAD, AUD and NZD) is equal to 0.0%. The dollar is perfectly mixed with some gains and some losses.
Bitcoin back below $8000. Reached $9090 last week
The digital currency is in the $7450 to $8400 range
The price of bitcoin is trading back below the $8000 level today after a plunge that took the price from around $8500 to $7700 in the first few hours of trading today. Since then, the price is waffling mostly below the natural $8000 level.
The move today brings the digital currency back into a $7450 to $8400 range. From May 13 to May 27, the price traded 12 of 14 days in that range (there were two days when the price traded below the $7450 low). The 100 hour MA is at $8456 and moving lower. That should be a risk/bias defining level now for the currency. Move above, and this tumble is just a normal correction.
On the downside, should the price be able to stay below the $8000 level, I would expect buyers near that $7450 low ($7500 sounds like a nice round level to buy against). By the way, the 38.2% of the move up from the April 26th low comes in at $7513.49. That increases the areas importance IF there is a dip.
Bulls in Bitcoin, can call these dips as opportunities to load up and also necessary evils if the price is to go higher and higher and higher. They need the naysayers to get offsides and be forced to cover on the squeezes higher.
Whether it pans out that way or not, I don’t know, but what I do know is if the $7500 area holds, the bulls are still more in control, and a break of the 100 and 200 hour MAs above (blue and green lines) would also be good for the buyers/bulls. If broken the $9090 high from last week would be on traders radars as the next key upside target.
Global Times editor: China convinced fair talks impossible without a thorough fight
Comment from Hu Xijin
China softening the stance? This is a useless speculation. Beijing is willing to negotiate but now is very much convinced fair talks are impossible without a thorough fight. The Chinese realized they were a bit naive before, believing trade talks can yield good results.
Hu has become a bit of a spokesman for China in the English media. He’s been right lately and it’s tough to imagine this is speculation on his part. More importantly, this doesn’t sound like China believes that something better is coming any time soon. They’re getting ready for it to get worse.