Global PMIs stagnates just above 50
US ADP Employment change miss expectations
Oil DOE highlights lower than expected drawdowns
Trump calls the EU and China currency manipulator
It takes some patience and calm to approach markets these days as things are starting to beahave a bit oddly. Today was a busy day on the data calandar with last round of the June manufacturing and service PMI data out of EU, UK and US highlighting stagnating growth - just above cotractionary levels. Furthermore, the afternoon saw the release of the ADP Non Farm Employment data missing expectations at 102K vs 140K expected. The day winded down with the release of a bearish weekly DOE Oil data disappointing expectations of larger drawdowns. In terms of headlines, Trump turned today against China and the EU accusing them of currency manipulations. Comment that comes after the announced "Renewed Positive Spirit of Talks" at the G20 and the new appointment of Christine Lagarde as ECB chair.
Global equities rally dragged by dovish central banks euphoria among traders. The recent deterioration in global economic data hasn't put a break to investors risk appetite with a consequent break down of the classic cross-asset class correlations. As yield continue to fall, SP500 printed a new all time high today with not a whole lot in the way of the 3000 mark. Dax is poised for its fifth consequitive positive week.
The FX space traded mixed amid lack of volumes ahead of US market closure and NFP. EUR traded choppy as trader await US Job report on Friday. GBP restested the 1.2600 level to the downside after the relesase of the June Service PMI which contracted to 50.2 vs the 51 expected, however signalining rising cost of inputs and strong job growth. AUD and JPY remained arround their weekly highs with the former supported by the positive performance of Iron Ore and Gold.
Crude Oil consolidated in the 57-56 range - after yesterday's sell off - despite the bearsih DOE report. Gold traded firm above the 1410 level amid weaker global data.
Global yields kept falling, notably with the US 10Y now below 2% and the Italian 10Y now at 1.651!!
If you missed the morning briefing from the desk click HERE