Market movers today
- Another quiet day in terms of economic data releases. Today’s highlights are preliminary US core CAPEX orders and shipments for June, which will shed light on investment growth in Q2. Also, look out for the US house prices at 15:00 CEST. Besides that, we get US consumer confidence (Conference Board) in the afternoon at 16:00 CEST.
- Look out for negotiations on a new US infrastructure package.
The 60 second overview
US-China relations: The poor relationship between US and China was once again underlined in the meeting in Tianjin between Deputy Secretary of State Wendy Sherman and foreign policy officials from China. However, both sides are at least focused on how to avoid the strained relationship to move into direct conflict. But there is little sign of movement on either side when it comes to accommodating any requests from the other side.
COVID-19: In the UK the 7-day moving average has moved lower for six days now. Cases in the US show tentative signs of stabilization. Concerns over new possible waves in the autumn will continue to linger, though, not least in the US where some groups are still against taking the vaccine, which can make it a challenge to reach herd immunity through vaccines alone.
Equities and bond yields: Markets have been quiet overnight. Chinese stocks continue lower after the recent crackdown on big tech and lately the education sector. Tesla presented a strong earnings report and delivered $1 billion in net income, a milestone for the 18-year-old company. Bond yields are unchanged from yesterday.
FX: It was a rough day for the USD yesterday, which lost out to the rest of the G10 sphere, while Scandies and GBP came out on top. The worthy highlights were EUR/SEK that fell below 10.20 and EUR/USD that rebounded above 1.18.
Credit: Sentiment in credit was slightly weak yesterday where iTraxx Xover widened almost 3bp (closing in 234bp) and Main close to ½bp wider (to 46½bp). HY bonds widened 1bp while IG closed ½bp tighter.
