Draghi ECB presidant 6am comment catalyst for big risk-on day.
"Markets now feel that the most likely scenario is that the ECB will buy
bonds in the market," ING rate strategist Alessandro Giansanti said.
Ten-year Spanish yields were last 40 basis points lower on the day at 6.996 percent,
some 565 basis points over their German equivalent.
Italian yields fell 39 basis points to 6.05 percent.
Durable goods sans airplanes is bad.
FHFA Housing Price Index May 0.8% NA NA 0.7% 0.8%
Jul 25 07:00 MBA Mortgage Index 07/21 0.9% NA NA 16.9%
Jul 25 10:00 New Home Sales Jun 350K 375K 373K 382K 369K
Jul 25 10:30 Crude Inventories 07/21 2.717M NA NA -0.809M
Jul 26 08:30 Initial Claims 07/21 353K 385K 381K 388K 386K
Jul 26 08:30 Continuing Claims 07/14 3287K 3300K 3300K 3317K 3300K
Jul 26 08:30 Durable Orders Jun 1.6% 1.0% 0.3% 1.6% 1.3% **********
Jul 26 08:30 Durable Orders - ex Transportation Jun -1.1% -0.3% -0.1% 0.8% 0.7%
Jul 26 10:00 Pending Home Sales Jun -1.4% 1.0% 0.9% 5.9%
Jul 27 08:30 GDP-Adv. Q2 0.4% 1.2% 1.9% **********
Jul 27 08:30 Chain Deflator-Adv. Q2 2.0% 1.6% 2.0%
Jul 27 09:55 Michigan Sentiment - Final Jul 71.5 72.0 72.0
FXE 122.15 1.08% has rallied back to some resistance at 123 in just last 2 days. ECB meets next week.
FXY 125.60 -0.06% Just watching this. For future ref, No trades taken with Yen yet. Look to spread vs others.
GLD 156.77 0.71% GC = 1615 moving to top of range 1630-40
SPY 136.17 1.65% 1375 is reasonable target. Follow through on Draghi? Some form of QE next week with SPY near 140?
138ish is a good setup for selling but pre-FED?
TLH 139.98 -0.39% Strong July PA . Very small pullback here. Decreasing day range.
USO 33.41 0.60% Dont know. For future reference havent taken a trade in the reversal of euro summit up 10% day in late JUN.
UUP 22.75 -1.00% Gold/Euro/Dollar moving in a QE/riskon/inflationary way preceding ECB and FED next week.
from breifing.com
Similar to May, the increase in orders can be attributed to strong demand for aircraft.
Defense and nondefense aircraft orders increased 23.9% and 14.3% respectively in June.
These gains were alluded to in the strong orders report from Boeing (BA).
Excluding aircraft, demand for durables dropped dramatically. Orders fell 1.1% in June
after increasing 0.8% in May. The consensus expected these orders to decline 0.1%.
Even though the decline exceeded expectations, the drop should
not have been too surprising. All of the regional manufacturing surveys from June highlighted weakness
in orders demand and the national ISM index dropped into negative territory for the first time since the recession.
******From Marc Chandler....Dragi ECB pre. 6am market moving statement********
What did Draghi say? There are two elements that are important. First, he said
The ECB was prepared to do whatever it takes to preserve the euro, within its
mandate. This hints at new policy action and the ECB meets next week. Second,
he suggested that if the premium on government borrowing damages the monetary
policy transmission mechanism, it is within the ECB's mandate to address it.
This suggests the resumption of the sovereign bond purchases program (SMP),
which was the rationale for it in the first place, over
German objections (led to two resignations, Weber and Stark).
By qualifying his willingness to do whatever it takes with a reference to the ECB's mandate,
Draghi is not signalling giving the ESM, which does not exist now and will not for at
least another six weeks or so, a banking license, as he has previously argued this is against the EU Treaties.
**********From Marc Chandler on ESM banlk license************
There are good reasons not to expect the ESM to get a banking license any time soon.
First, the ESM does not exist at the moment. It cannot be established without Germany
and Germany is waiting on ruling from its Constitutional Court. As a defender of
German sovereignty, the Court may be reluctant to rule against something that
parliament has already approved, but may put more limits on what can be done
without parliament's approval.
Second, there are profound arguments against granting the ESM a banking license.
The ECB President Draghi said it as recently as two months ago on grounds that
it would violate the EU treaties that prohibit the central bank from financing
government deficits. The blurring of the line between monetary
and fiscal policy is problematic.
Thirdly, it is not clear what kind ofcontrols could be put into place.
Unlimited ESM borrowings could, without parliamentary approval increase
German (and other creditors more generally) contingent liabilities.
"Markets now feel that the most likely scenario is that the ECB will buy
bonds in the market," ING rate strategist Alessandro Giansanti said.
Ten-year Spanish yields were last 40 basis points lower on the day at 6.996 percent,
some 565 basis points over their German equivalent.
Italian yields fell 39 basis points to 6.05 percent.
Durable goods sans airplanes is bad.
FHFA Housing Price Index May 0.8% NA NA 0.7% 0.8%
Jul 25 07:00 MBA Mortgage Index 07/21 0.9% NA NA 16.9%
Jul 25 10:00 New Home Sales Jun 350K 375K 373K 382K 369K
Jul 25 10:30 Crude Inventories 07/21 2.717M NA NA -0.809M
Jul 26 08:30 Initial Claims 07/21 353K 385K 381K 388K 386K
Jul 26 08:30 Continuing Claims 07/14 3287K 3300K 3300K 3317K 3300K
Jul 26 08:30 Durable Orders Jun 1.6% 1.0% 0.3% 1.6% 1.3% **********
Jul 26 08:30 Durable Orders - ex Transportation Jun -1.1% -0.3% -0.1% 0.8% 0.7%
Jul 26 10:00 Pending Home Sales Jun -1.4% 1.0% 0.9% 5.9%
Jul 27 08:30 GDP-Adv. Q2 0.4% 1.2% 1.9% **********
Jul 27 08:30 Chain Deflator-Adv. Q2 2.0% 1.6% 2.0%
Jul 27 09:55 Michigan Sentiment - Final Jul 71.5 72.0 72.0
FXE 122.15 1.08% has rallied back to some resistance at 123 in just last 2 days. ECB meets next week.
FXY 125.60 -0.06% Just watching this. For future ref, No trades taken with Yen yet. Look to spread vs others.
GLD 156.77 0.71% GC = 1615 moving to top of range 1630-40
SPY 136.17 1.65% 1375 is reasonable target. Follow through on Draghi? Some form of QE next week with SPY near 140?
138ish is a good setup for selling but pre-FED?
TLH 139.98 -0.39% Strong July PA . Very small pullback here. Decreasing day range.
USO 33.41 0.60% Dont know. For future reference havent taken a trade in the reversal of euro summit up 10% day in late JUN.
UUP 22.75 -1.00% Gold/Euro/Dollar moving in a QE/riskon/inflationary way preceding ECB and FED next week.
from breifing.com
Similar to May, the increase in orders can be attributed to strong demand for aircraft.
Defense and nondefense aircraft orders increased 23.9% and 14.3% respectively in June.
These gains were alluded to in the strong orders report from Boeing (BA).
Excluding aircraft, demand for durables dropped dramatically. Orders fell 1.1% in June
after increasing 0.8% in May. The consensus expected these orders to decline 0.1%.
Even though the decline exceeded expectations, the drop should
not have been too surprising. All of the regional manufacturing surveys from June highlighted weakness
in orders demand and the national ISM index dropped into negative territory for the first time since the recession.
******From Marc Chandler....Dragi ECB pre. 6am market moving statement********
What did Draghi say? There are two elements that are important. First, he said
The ECB was prepared to do whatever it takes to preserve the euro, within its
mandate. This hints at new policy action and the ECB meets next week. Second,
he suggested that if the premium on government borrowing damages the monetary
policy transmission mechanism, it is within the ECB's mandate to address it.
This suggests the resumption of the sovereign bond purchases program (SMP),
which was the rationale for it in the first place, over
German objections (led to two resignations, Weber and Stark).
By qualifying his willingness to do whatever it takes with a reference to the ECB's mandate,
Draghi is not signalling giving the ESM, which does not exist now and will not for at
least another six weeks or so, a banking license, as he has previously argued this is against the EU Treaties.
**********From Marc Chandler on ESM banlk license************
There are good reasons not to expect the ESM to get a banking license any time soon.
First, the ESM does not exist at the moment. It cannot be established without Germany
and Germany is waiting on ruling from its Constitutional Court. As a defender of
German sovereignty, the Court may be reluctant to rule against something that
parliament has already approved, but may put more limits on what can be done
without parliament's approval.
Second, there are profound arguments against granting the ESM a banking license.
The ECB President Draghi said it as recently as two months ago on grounds that
it would violate the EU treaties that prohibit the central bank from financing
government deficits. The blurring of the line between monetary
and fiscal policy is problematic.
Thirdly, it is not clear what kind ofcontrols could be put into place.
Unlimited ESM borrowings could, without parliamentary approval increase
German (and other creditors more generally) contingent liabilities.