DXY eased last night as CNY and EUR firmed:
The Australian dollar was down across the board:
Gold jumped:
Oil was bashed again:
Metals are amusing:
Miners were soft:
EM stocks are stalled:
Junk was mixed:
Treasuries big bigly:
Bunds biggerer:
And Aussie bonds:
Stocks were hit as earnings were crapola:
Westpac has the wrap:
Event Wrap
US housing starts fell 0.9% in June, the volatile multi-family segment accounting for all the weakness. More encouragingly single family starts rose 3.5%, though that follows a 5.1% fall in the previous month.
UK June inflation was very much in line with expectations. Headline and core CPI at 2.0%y/y (prior 2.0%y/y) and 1.8%y/y (prior 1.7%) were in line with estimates and the headline remains at the BoE’s target.
Eurozone final headline CPI lifted marginally to +0.2%m/m and 1.3%y/y (initial releases of +0.2%m/m and 1.2%y/y) but the more important core CPI was unchanged at 1.1%y/y.
Event Outlook
Australia: Jun employment is expected to rise 9k and see the unemployment rate hold at 5.2%. Westpac is forecasting a 10k increase in employment but expects the unemployment rate to decline to 5.1% due to a pull-back in the participation rate. Q2 NAB business survey will provide further detail on the monthly read – conditions (+2) and confidence (+3) both below average in Jun.
UK: Jun retail sales are anticipated to decrease 0.3% following a 0.5% decline in May.
US: Fedspeak involves Bosticin an armchair chart and Williams on monetary policy.
The two day G7 Finance Ministers and Central Bank Governors meeting reaches a conclusion. It is the last meeting to be held before the G7 Summit of heads of state on August 24-26.
Not helping stocks was this:
Trade negotiations between the world’s two largest economies are stalled over disagreements surrounding Chinese tech giant Huawei, The Wall Street Journal reported Wednesday.
Progress on resolving the trade war is stuck in limbo until the White House determines how to address China’s demand to back off restrictions on Huawei, the Journal said, citing people familiar with the talks.
There has been little public progress since President Trump and President Xi Jinping agreed to a truce at the G-20 last month. The issue of intellectual property was a key sticking point at the June international summit, despite Washington and Beijing’s agreement to restart talks. The issue over which semiconductor chips, among other products, can be sold to Huawei without security issues remains a key point of contention, according to the Journal.
But earnings were lousing with BofAML, Netflix and Alcoa all disappointing as falling global growth sucks down US industry:
Killing US investment:
And let me just remind you what will happen if stock prices do follow earnings downwards:
Yeh. That’s a correlation from Hell. While risk off reigns, the Australian dollar falls.
