Recap :


  • The weak GDP print today should be discounted. Things in the US that are looking up include both manufacturing and services PMIs as well as housing. With respect to US housing, note that the housing data surprises have moved out of negative territory for the first time since mid January.
  • The front end looks like it is rich enough to start shorting. Having said that, month end flows may continue to support the market for a few more days.
  • Echos of the mid 90’s, via HeroZedge: The S&P500 has now gone 47 days without a gain or loss of more than 1% – the longest since 1995,
  • Great post that is bullish equities from TMM:
  • Similar conclusion from Quantifiable Edges:

  • GS notes that Kuroda’s speech this week was particularly interesting. He said that “Specifically, through the summer, the year-on-year increase in the CPI is expected to slow to around 1.0%. Subsequently, as trend inflation pressure continues to strengthen, the year-on-year increase in the CPI is expected to follow an upward trend again from the second half of this fiscal year and reach around 2.0% – the price stability target – in or around fiscal year 2015.” GS notes that this requires a pickup of inflation quite quickly to a 2.0% annual rate for this forecast to hold:

    The implication is that the BoJ may need to ease in 4Q or 1Q if the inflation pickup doesn’t happen. USDJPY vol may pickup around then.


  • US DGO declined -1.0% vs 0.0% exp and +0.8% prev. The core measure rose 0.7% vs 0.5% exp and -1.2% prev
  • US 1Q GDP was revised sharply lower to -2.9% vs -1.8% exp and -1.0% prev. Personal Consumption was a large driver, falling to 1.0% vs 3.1% prev
  • German GfK Consumer Confidence improved to 8.9 vs 8.6 exp and 8.5 prev
  • Italy Consumer Confidence declined to 105.7 vs 106.4 exp and 106.3 prev
  • The Obama administration cleared the way for the first exports of unrefined American oil in nearly four decades, allowing energy companies to start chipping away at the longtime ban on selling U.S. oil abroad… the Commerce Department gave Pioneer Natural Resources Co. and Enterprise Products Partners LP permission to ship a type of ultralight oil known as condensate to foreign buyers… The shipments could begin as soon as August and are likely to be small, people familiar with the matter said. It isn’t clear how much oil the two companies are allowed to export under the rulings, which were issued since the start of this year. The Commerce Department’s Bureau of Industry and Security approved the moves using a process known as a private ruling. – WSJ

Upcoming Data:

  • Thu: France Consumer Confidence, US Jobless Claims, Personal Income
  • Fri: Germany CPI, UMichigan Confidence
  • Weekend: New ZealandBuilding Permits, Business Confidence, Japan Housing Starts,
  • Mon: Month End, EU Money Supply, CPI, UK Mortgage Approvals, Canada GDP, ChicagoPMI, US Pending Home Sales, AustraliaMfg PMI, China Mfg PMI
  • Tue: RBA, EU PMI, Employment, US ISM, Australia Trade Balance
  • Wed: UK House Prices, US ADP Employment, China PMIs, Australia Retail Sales, Building Approvals,