U.S. Opening Comments
European Equities are broadly lower behind y/day’s poor housing data and subsequent financials sell-off in the U.S.. Inflation is also rearing up with Japanese Core CPI at 10yr highs and German Import Prices up 1.5% m-o-m pushing the y-o-y figure to 8.9%. U.K. Q2 GDP came in at 1.6% y-o-y, a 0.7% drop from the Q1 reading. Dow Jones and S&P futures are in the red at this writing as concerns over financial stocks grow in light of very high discount window borrowing in the past week. In the news this morning, WaMu’s CFO is leaving and WB is trying to bat down rumors of credit concerns.
European and U.S. treasuries are firm this morning due to weak equity markets with yields coming off 5bps in the U.K. 10yr and 6bps in the Bund. The U.K. 2/10 is flat, the German 2/10 is at 13bps and the U.S. 2/10 is out at 142bps.
September WTI is up nearly $1.00 ahead of the NY open and Metals are firming as well behind a sharp sell-off in the USD. USD/JPY is lagging the sell-off a bit due to demand in GBP/JPY and EUR/JPY.
Today’s data includes Durable Goods Orders at 8:30am EST. June Durable Goods Ex Transports are expected to come in down 0.2% and the headline data is expected at down 0.3%.
The July final Universtiy of Michigan Consumer Confidence data is due at 9:55am EST and is expected to be little changed at 56.4 versus a 56.6 preliminary reading.
June New Home Sales at 10am EST will be closely watched after yesterday’s worse than expected Existing Home Sales data. New Home Sales are expected at 503k, a drop of 9k from the May reading. On a month on month basis, New Home Sales are expected to drop 1.8% versus a 2.5% drop last time.