The Day Ahead
0800hrs UK AS Austrian Chancellor Sebastian Kurz speaks in Vienna on EU policy ahead of taking EU Presidency in July
0930hrs UK UK Retail Sales Ex Fuel (est 0.22%mom / 2.33%yoy vs previous 1.3% / 1.5%)
0930hrs UK UK Retail Sales Inc Fuel (est 0.42%mom / 2.29%yoy vs previous 1.6% / 1.4%)
1245hrs UK EU ECB Rate Policy Decision (est Refi 0.00% vs previous 0.00%)
1330hrs UK EU ECB President Mario Draghi holds press conference in Riga
1330hrs UK US Retail Sales (est 0.36%mom / 0.48%mom ex auto vs previous 0.2% / 0.3%)
1330hrs UK US Weekly Jobless Claims (est 222.86K vs previous 222K)
1500hrs UK US Business Inventories (est 0.3% vs previous 0.0%)
1500hrs UK NO Norges Bank Deputy Governor Egil Matsen speaks in Oslo
1600hrs UK EU European Commission President Jean Claude Juncker speaks in Munich
EU EuroZone Trade Chief Cecilia Malmstrom speaks in Brussels
EU Consob Head Mario Nava, Italian Banking DG Giovanni Sabatini, ECB’s Sergio Nicoletti Altimari among speakers at Italian Banking Conference
In the US, we have earnings from PolarityTE and Adobe Systems
In the UK, the following FTSE100 stocks go Ex Div today; 3I, Mediclinic, NMC Health, Persimmon, Severn Trent, WPP. Total 4.476 Index Points
COMCAST TOPS DISNEY WITH A $65BLN OFFER FOR FOX
: TIME FOR KICK OFF – THE WORLD CUP OPENER IS RUSSIA vs SAUDI ARABIA IN MOSCOW
: TIME FOR TEE OFF – THE US OPEN BEGINS IN SOUTHAMPTON, NEW YORK
The Day So Far….
STOCKS: Wall Street’s leading shares ended a choppy session lower yesterday after the Fed raised interest rates as was expected, but also signaled a slightly faster pace of rate increases this year. They are now expected to hike rates not once as was previously expected, but twice more this year. The Fed, which raised rates by 25bps, also dropped it’s longstanding pledge to stimulate the economy “for some time.” Analysts now expect inflation to run above the Fed’s 2% target rate, hitting a level of 2.1% this year and possibly staying there until 2020. Stocks had a volatile day, but ended near the lows of the day. The S&P500 closed 11.22 points softer at 2775.63, the Dow ended the day 119.53 lower at 25201.2, and the Nasdaq100 almost unchanged at 3.927 easier at 7205.26
Asia-Pacific stocks were lower after the FOMC delivered the hike, with US-China trade matters as well as weak Retail Sales data from China bubbling in the background. The Nikkei 225 was under pressure, as the real estate sector provided the most weight, while financials outperformed, providing a modest counterbalance. Sellers gathered momentum and the market closed on the lows. The Hang Seng also traded lower, as consumer staples added the most weight, as not one of the major sectors posted gains. Again the momentum has continued in the afternoon session, although we have seen a slight rally as we approach the close. The Shanghai Composite lost 0.5% by mid afternoon, but a late rally has seen the index virtually unchanged into the close. Australia's ASX was also lower, but fared better than most of its regional counterparts. Utilities and health care provided the most weight, while telecoms provided the most notable gain.
US TREASURYS: Tsys have stuck to a tight 6 tick range in Asia-Pacific dealing. T-Notes haven't threatened the Pre-FOMC decision highs or the initial FOMC reaction lows, with the belly of the curve modestly underperforming the wings in cash trade. A 2.6K TYU8 block at 119.07 helped to support the space, as did reported demand out of Japan, which led to fresh session highs being printed.
OIL: The major oil metrics meandered overnight, sticking to a tight range, supported by a large drop in Wednesday's headline DoE crude stocks. WTI futures trading 3c softer at $66.61 with Brent 26c easier at $76.48
GOLD: The yellow metal traded either side of $1300/oz after it managed to recover the initial losses that were posted in the wake of the FOMC MonPol decision, supported by the impending US decision on China tariffs. August futures currently $3.5 higher at $1304.7 and trying to consolidate above the $1300 level
FOREX: The USD struggled for clear direction in the wake of the FOMC MonPol decision as questions re: US-China trade relations and the impending US decision on tariffs crimped USD demand, with the greenback unwinding most of its initial gains. - Overnight, a soft AU labour market report weighed on the AUD, with soft Chinese activity data adding additional pressure. Elsewhere USDJPY's hourly support at 110.10 held, as JPY shrugged off the latest tweak to the BoJ's Rinban ops. The remaining majors stuck to a tight range.
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