German DAX, +0.8%
The major European stock indices have seen solid gains in trading today. The provisional closes are showing:
- German DAX, +0.9%
- France’s CAC, +1.2%
- UK FTSE 100, +0.6%
- Spain’s Ibex, +1.3%
- Italy’s FTSE MIB, +1.2%
In the European debt market, the yields on moved lower with the UK yield down -3.8% after the Bank of England decision.
In other markets as London/European traders look toward the exit shows
- Gold has given up its gains and trades up only $0.53 or 0.03% at $1779.20. At the start of the New York session, the price was up $7.80 at $1786.35.
- Spot silver is up $0.17 or 0.69% at $26.07. That is the same level as the start of the North American session
- WTI crude oil futures are up $0.14 or 0.19% at $73.22. The low price reached $72.32. The high extended to $73.61
- Bitcoin is trading up $1348 or 4.07% at $34,414. At the start of the New York session it was trading at $34,124.70
A look at the US stock market as both the NASDAQ index and the S&P index both looking to close at record highs
- S&P index up 23 points or 0.54% at 4264.90
- NASDAQ index up 120.51 points or 0.4% at 14392.20
- Dow industrial average up 240 points or 0.71% at 34114.68
Infrastructure could boost US growth and pull forward rate hikes
The odds of a bipartisan infrastructure deal rose today after Sen Romney said the framework was agreed and a report said Biden was likely to support it.
To be sure, there’s still a long road and politics is filled with twists and turns but the bull case is a nearly $1 trillion bill passed with bipartisan support followed by a Democrat-only bill that could be $2-4 trillion.
The dollar is creeping higher even as stocks rise, suggesting this is a US-only story rather than part of the risk trade. Interestingly, yields are lower though, which is not what you would expect on a higher prospect of more spending.
There are still plenty of details to work out though and we’re now into the quarter-end countdown so maybe I’m reading too much into the dollar move anyway.
Lots and lots
Hard to think of slower markets today.
Still looking for an explanation after the Fed’s latest hawkish dot plot shift then here are the Fed speakers up later today and there are a lot of them. The biases noted. Hopefully they will inject some life into things.
- Barkin – neutral
- Bostic – hawk
- Harker – hawk
- Williams – neutral
- Bullard – hawk now
- Kaplan – hawk
The one to watch will be Williams.
Any sense in which the average targeted inflation has been ‘achieved’ or the Fed has moved on from that and that will be USD bullish. On June 22 Williams said that’ I don’t think it is close to the ‘substantial progress’ that we set out ‘to trigger taper’.
Copper 4 hour trend line
Copper futures retraced a little this week, but there are some bearish signals according to Bloomberg:
- China’s import demand is around lowest since 2017
- LME stockpiles are up around 30% this month
On top of this China, fearing consumer inflation, will start sales of the metal from Gov’t reserves. This could be the start of China keeping copper prices lower.
Low risk entry is on break of 4 hour trendline. Fed speakers later could push it lower if USD rises on any hawkish comments – one to watch
Sleepy markets with flat moves out there –
USD flat ahead of a wave of Fed speakers and Williams is noteworthy as a potential neutral/dove who could become a hawk
yields, you guessed it, flat.
European, asian and US futures all….flat, but VIX still lower, so could see some buyers step in at the European cash open
An official from China’s banking and insurance regulator says expects PPI to hit 10% m/m I’m guessing if it feeds through to CPI. Awaiting more detail.
There are various reports that the US is preparing to return to talks with Iran.
The correct nuance though is that US negotiators are prepared to return once the leadership in Tehran is ready. Comments to that effect come from a Biden administration official.
- negotiating team could return to talks in Vienna as early as next week
- though that date might be pushed back, according to the official, who asked not to be identified discussing private deliberations