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Daily Briefing – Monday, June 26, 2017

Europe

European equities closed in the red on Friday as oil continued to languish in the low 40s. The FTSE showed its 4th straight losing session, ending 2% down, the Dax nearly ½ a percent down and the CAC and Eurostoxx a third. Last week’s BoE interest rate vote showed a growing dissension amidst board members, following the Fed and indicating a central bank dilemma. Italian officials yesterday agreed to bail out Veneto Banca and Banca Popolare di Vicenza to the sum of 17 bn Euros, selling the two banks to Italy’s 2nd largest bank, Intesa for a single Euro. Next on the block – Banca Monte dei Paschi di Siena, the 4th largest bank in the land.

 

Asia

Asian stocks begin the week in the green thanks to tech and commodity prices, plus gains in oil – albeit weak. The Shenzhen composite leads with a 1.24% gain, with the hang Seng up a half and the Nikkei a tenth. Last night the Bank of Japan in its policy summary reiterated that continued policy is required to achieve 2% inflation.

 

 

US

After dropping 11.4% in April, new home sales in May regained 2.9% – half of the expected 5.4% – with median prices up to $350K, a 3-month high. PMIs are at a 9-month low, with manufacturing down to 52.1 and services down to 53. Meanwhile, Bank of America on Friday slashed its GDP growth forecast for 2018 to 2.1% from 2.5%. In its announcement, the bank’s senior economist Michelle Meyer said that stimulus won’t help solve the problem, since liquidity is fueling stocks.

 

 

Commodities

Oil continues to edge up from Thursday’s $42 low, suffering a slight mishap as the Baker Hughes rig reading came in on Friday with an extra 11 operating drills – the 23rd consecutive week of rising counts.

 

 

Today’s Events

8 AM GMT Germany: Business climate
12:30 PM GMT US: Durable Goods & Chicago Fed Activity Index, followed at 2 by the Dallas Fed Manufacturing index
9:45 PM GMT NZ: Trade  Balance

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