Rise and shine everyone.

Some interesting news from other markets this morning.

China held their Loan Prime Rates (1Y and 5Y). Traders were expecting a cut given that the activity data continues to remain weak. However, as we pointed out yesterday, the yields and the currency have not exactly held up well and cutting rates would put additional pressure on both. The markets however, did not take this well. The Shanghai Composite closed -0.93% and the Hang Seng closed at -0.33%.

In Europe, Sweden’s Riksbank went ahead and delivered their second 25-bp cut with the statement that they expect 2-3 more cuts this year. The rate is now 3.5%. This ultra-dovish stance saw the Swedish Krona weaken further against major currencies.

Australia’s most recent RBA meeting minutes were released and took the market by surprise with more hawkish stance. Last week, after New Zealand unexpectedly cut rates, Australia has been seeing their market rally in anticipation of easing coming sooner. However, the minutes discussed: “Members agreed unlikely rates that would be cut in the short term. Stressed that a longer rate pause than market implies might achieve CPI goal. Immediate hike in rates could be justified if risks to inflation had increased 'materially’”. The ASX declined on the news while the AUD/USD saw a slight increase.

It’s an otherwise quiet Tuesday. Markets continue to rally in the absence of major news. We have two Fed Speakers today - Bostic and Barr.

US Housing Data

Yesterday Redfin released their monthly data that showed that the Sales of Existing Homes rose 0.6% m/m in July, but fell 2% y/y, the lowest July level in records dating back to 2012.

Pending sales—a more current gauge of demand that includes both existing and newly-constructed homes—fell to the lowest level of any month on record aside from April 2020.

Redfin also reported that home buyers are backing out of deals at a record pace.

“Roughly 59,000 home-purchase agreements were canceled in July, equal to 15.8% of homes that went under contract that month—the highest percentage of any July on record. Redfin’s records for this statistic date back to 2017.”

Chart of the Day

According to a recent report from BofA, funds are the most underweight Apple in the US!

Calendars

(news taken from Reuters, FT, Bloomberg; Calendar from Trading Economics)