May service sector index from the Institute for Supply Management Strong numbers all around. The market was leaning in this direction after the Markit PMI but this confirms it. The US dollar is at the best levels of the day against the euro and commodity currencies.
The final reading on the services sector The ISM non-manufacturing index is due at the top of the hour. The upside surprise and series high bodes well. The US dollar is higher on the headlines.
All $160 billion of the huge hedge fund is net short equities has some interesting comments from Bridgewater warning about higher rates leading to trouble in emerging markets that spreads to global equities.
The Nasdaq stocks are doing better and eyes the all time highs at 7637.27. The major US stock indices are open and the Nasdaq is trading higher and leads the way, but the gains are somewhat contained. The Nasdaq closed at a new record yesterday. A gain today would be another new record (duh). The…
Bank of Japan cuts purchases of 5-10yr ’til maturity remaining JGBs BOJ scheduled QE operation today (buying JGBs) Yen up a few tics on this. A bit of a knee jerk and an excuse to cut out a few USD/JPY longs.
Federal Reserve St. Louis head James Bullard on Bloomberg TV – Trade talks creating more uncertainty in economy – Difficult to see if too much will change after the talks more to come
China’s Economic Information Daily (headline via Bloomberg) says the pbocc People’s Bank of China may cut the reserve requirement ratio (RRR) by a further 0.5 to 1.5% by the end of the year
Mester on the economy – Italy hasn’t changed view of US economy fundamentals – Doesn’t think inflation will spike higher Nothing new from Mester.
Quarles on CNBC – Trade measures haven’t had big macro effect yet – Markets have absorbed Italy news reasonably well
Comments from Brainard on the economy – Italy political developments have introduced some risks to global synchronized growth – Gradual US rate hikes appropriate That last line is a bit of a warning. When that language is changed, it’s going to sound more hawkish.