Market movers today
It is another quiet day on the data front and hence focus in the market will continue to be on political developments, notably the trade frictions between the US and China, where the official stand-off was confirmed over the weekend after an op-ed in the Chinese State media that China will not back down in the trade war.
The Chinese trade balance number, due to be released overnight, will be followed with some interest in light of the trade frictions. Export growth will also be an important gauge of the strength of the global economy.
Today, the June number for industrial production in Germany will gain some attention, especially as some of the business confidence indicators have weakened recently on the back of global trade tensions. Market consensus is for a small decline in the growth rate y/y to 3%.
In Italy, statements from political leaders on the budget for 2019 will be interesting ahead of the finalisation of the budget in September and could influence market sentiment on Italy.
In the Scandies, industrial production data in Sweden and Norway is due out.
Selected market news
The S&P 500 ended yesterday’s session at its highest level since the start of 2008. The positive sentiment was driven by financials and tech firms. Hence, the market is ‘ignoring’ the trade conflict between the US and China. 10Y Treasuries continue to trade below 3% while we are awaiting this week’s auction of some USD78bn in the 3Y, 10Y and 30Y US treasury bonds.
We have seen a mixed picture in the Asian markets again this morning with Japanese and Chinese equities drifting higher, while Australian equities are drifting lower. The earnings season continues today.
Movements in the major currencies as well as 10Y JGBs have been modest this morning. 10Y JGBs are trading at a yield of 10bp.
