The View From The Tower

Overnight Snapshot

 
The Day Ahead

1030hrs UK         UK Bank of England’s Michael Saunders speaks in Glasgow
1230hrs UK         EU ECB Governing Council member Jens Weidmann at Spring meeting of IWF/World Bank in Washington
1440hrs UK         US Chicago Fed President Charles Evans speaks in Chicago
1500hrs UK         EU Eurozone Consumer Confidence (est -0.15 vs previous 0.1)
1600hrs UK         SW Riksbank Governor Stefan Ingves speaks in Washington
1615hrs UK         CA Bank of Canada’s Carolyn Wilkins speaks at IMF
1615hrs UK         US San Francisco Fed President Jon Williams speaks in California
 
US earnings releases today include General Electric, Honeywell, Baker Hughes, and Schlumberger
 
The Day So Far….

STOCKS: Wall Street’s three main indexes all finished in the red yesterday, with tobacco stocks leading the fall in Consumer Staples and concerns over smart phone demand denting Techs although rising bond yields and decent earnings gave the Financials a fillip. High yields mean investors lean towards bonds rather than equities although yields also boost bank profits. General losses were pared towards the close however as Bloomberg reported that Deputy Attorney General Rod Rosenstein had informed President Trump last week that he is not a target in Special Counsel Robert Mueller’s Russia investigation. The S&P500 closed down 15.51 at 2693.13 after being in the red all  day, after a very brief venture in to positive territory just after the open, Dow stocks slid 83.18 points closing 24664.89, and the Nasdaq100 finished -58.325 at 6774.888
Asia-Pacific indices moved lower on Friday as the outlook for tech names dimmed.  The Nikkei 225 lost 0.2% as the materials space led the way lower, although gains for financials & consumer staples limited the move lower.  The Hang Seng shed 0.4% as IT & energy names led the decline, while China's CSI 300 shed 0.8% as the PBoC refrained from injecting liquidity via OMOs.  Australia's ASX 200 lost 0.21%, with telecoms once again leading the way lower, while consumer staples was the biggest gainer on a sectoral basis. - US index futures conformed with the trend, as the e-mini S&P traded flat & the mini Dow lost 6 points.
 
US TSYS: The space has edged lower in Asia-Pacific hours with the curve ever so slightly steeper. The move has come alongside an uptick in USDJPY, and as Fed voter Mester stuck to her hawkish script. - The Eurodollar strip is virtually unchanged at the time of writing with all of the white and red contracts printing unchanged to half a tick better than settle.
 
OIL: Oil futures sit virtually unchanged, with WTI last at $68.25 & Brent at $73.75. - Participants look to the OPEC JMMC meeting on Friday. - Traders also eye the latest weekly Baker Hughes rig count release.
 
GOLD: The yellow metal edged lower, shedding $2 to trade at $1343/oz.
 
FOREX: JPY crosses moved to highs on importer demand for USDJPY which ate through touted exporter selling orders ~107.50. JPY crosses are off highs after the Nikkei moved into -ve territory. - AUDUSD was lower, last trading at 0.7715, off of lows of 0.7706. Ex-Asia funds were rumoured to be the driving force behind the sell off, with option related bids in front of 0.7700, with some A$1.02bln worth of 0.7700 FX options set to roll off at today's 10AM NY cut. There is also talk of macro sell orders between 0.7730-40. NZDUSD underperformed, losing 30 or so pips after working it's way
through options related bids at .7250 to deal at 0.7245 last. - GBPUSD last trades at 1.4080, with stories suggesting that the EU is set to reject UK PM May's solution to the Irish border issue and reports pointing to infighting within the Tory party. Of course, the bigger story was the cautious stance that BoE Carney took in his address made during late London hours. - USDCAD stuck to a tight range in front of today's Canadian CPI & retail sales data.

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