June 14, 2021 - Financial Occultist

Moves above 100 day MA at 1.497% as well

The 10 year yield moved above its 100 day MA at 1.497% and also briefly breached the 1.50% as well. It will require staying above each of those levels to keep the upside move going. If that cannot happen, the bias remains to the downside.

European indices close the day with gains

14-Jun-21 10:03 pm

Anirudh Sethi

German Dax lags (unchanged on the day)

The major European indices are closing the day with gains. The exception is the German DAX which is closing near unchanged levels. The provisional closes are showing:

German DAX, unchanged
France’s CAC, +0.3%
UKs FTSE 100, +0.3%
Spain’s Ibex, +0.9%
Italy’s FTSE MIB, +0.2%.

In other markets as European traders look to exit:

Spot gold is down $-13.82 or -0.73% at $1864
spot silver is up one cent or 0.04% at $27.92.
WTI crude oil futures are up $0.46 or 0.65% at $71.36. That is off the intraday high of $71.78, but above the low at $70.65.
Bitcoin remains above the $40,000 level at $40,713.35

In the US stock market, the Dow industrial average is moving lower. The latest casualty is J.P. Morgan which is now down -2% after comments from CEO Jamie Dimon.

Dow -220 points or -0.63% at 34261.54
S&P -11 points or -0.26% at 4236.31
NASDAQ +33 points or 0.24% at 14102.43

In the US debt market, yields are higher with the 10 year up 3.88 basis points and

German Dax lags (unchanged on the day)
The benchmark 10 year yields in Europe are also higher with Spain 10 year up 3.4 basis points leading the way:

IN the forex, the NZD remains the strongest and the JPY is the weakest. The USD is mixed with gains vs the JPY and CHF, and declines vs the EUR, CAD, NZD and AUD. The USD is near unchanged verse the GBP.

J.P. Morgan’s Dimon: Is prepare for higher rates, more inflation

14-Jun-21 10:02 pm

Analysis

Anirudh Sethi

Dimon speaking at Morgan Stanley conference

Staying on the inflation theme, JP Morgans Jamie Dimon speaking at Morgan Stanley conference says that the bank is prepared for higher rates and more inflation.

In a somewhat surprise critical comment about his company, he says:

JP Morgan did not have imagination to do what Square did
The banking system is going to be in tough shape
Will have to fight hard amid tough competition

JP Morgan stock is trading down -$2.77 or -1.73% to $157.52 after his comments.

PS. The NY Fed survey for May shows inflation expectations 1 year and 3 year ahead rose sharply.

Eurozone April industrial production +0.8% vs +0.4% m/m expected

14-Jun-21 02:31 pm

Anirudh Sethi

Latest data released by Eurostat – 14 June 2021

Prior +0.1%; revised to +0.4%
Industrial production WDA +39.3% vs +37.4% y/y expected
Prior +10.9%; revised to +11.5%

A solid beat and upward revisions as well, so overall that’s a good report as euro area industrial output shows a decent climb in April.

Production of durable goods was up 3.4%, capital goods 1.4%, and intermediate goods 0.8%. The only downside was non-durable goods, which fell 0.3% in April.

Heads up: UK PM Johnson to make statement on virus restrictions later today

14-Jun-21 02:30 pm

Analysis

Anirudh Sethi

The statement is expected at 1700 GMT

There has been talk since the weekend that Johnson will delay the end of restrictions in the UK amid fears of virus variants, which he says is a “serious concern”.

The initial plan was to reopen everything “no earlier than 21 June” i.e. next week but that timeline may be pushed back now. Still, it is a bit of a minor hiccup after the progress made by the UK economy in the past two months.