China still in the news
Although China announced some US tariff waivers, they did ban meat imports from Australia. Pres. Trump said that there will not be a renegotiation of the Phase I trade deal. The question is can China adhere to the agreement given the COVID impact on the economy. At the close yesterday, the USD was the strongest of the majors and the NZD the weakest. At the start of the day today, the currencies have flip-flopped. The NZD is the strongest and the USD is the weakest. The Fed will begin purchases of corporate ETFs in the market starting today, which in effect puts a backstop in that market (and has driven a slew of corporate bond issuances). It is also lending a helping hand to the tone in the stock market (risk on flows) .
The ranges and changes below show the USD is trading at the low extremes vs all the major currencies. The JPY pairs are hanging around unchanged after rebounding from lower levels. The pip ranges are mixed with more volatility in the AUDUSD and NZDUSD (ranges are near the 22 day averages at the start of the NY session) after falling sharply in the Asian session, before rebounding into the NY open.
In other markets:
- spot gold is trading up around $5 or 0.29% at $1702.76. The price like yesterday, has been trading above and below the $1700 level with the high price at $1707.77 and the low price on the day at some $1693.33.
- WTI crude oil futures are trading up a dollars 16 for the July contract or 4.6% at $26.23. The low price came in at $25.15. The high price for the day is reached $26.43
in the premarket for US stocks, the futures are implying a higher opening:
- Dow, +114 points
- NASDAQ index +25 points
- S&P index +11 points
in the European equity market major indices are mostly higher with the exception of France:
- German DAX, +0.3%
- France’s CAC, -0.3%
- UK’s FTSE 100, +0.8%
- Spain’s Ibex, +0.9%
- Italy’s FTSE MIB, +0.9%
In the US debt market, the yields are little changed from a close yesterday. The US treasury will auction off 10 year notes at 1 PM ET:
In the European debt market, the benchmark 10 year yields are mixed with German yields up 2.8 basis points 1 and Spain and Portugal yields down -1.4 basis points: