Breakfast Bites - Mixed market awaits US Retail Sales

Rise and shine everyone.

US Equity Markets reached another all-time high yesterday but, under the surface price action remains mixed. Markets are still speculating about a September rate cut based on inflation data coming in lower. Equity futures are flat this morning, waiting for US Retail Sales data to be released at 8:30am ET.

European markets saw some gains yesterday but volatility continues to remain high. Bond Yield spreads tightened. Equity markets are flat this morning with the Euro reversing some of its gains from yesterday. ZEW Economic Sentiment released this morning came out higher for both the EA and Germany.

Asian markets opened higher following yesterday’s US price action. The Reserve Bank of Australia held rates steady, as expected reiterating the stance of not ruling anything "in or out". It was noted that inflation remains elevated, with the persistence of services inflation being a major uncertainty. There is concern that rising house prices and tax cuts will likely bolster consumption in the coming year. Aussie equities are very marginally higher while the Aussie Dollar remains flat.

Japan recovered some of its losses after Governor Ueda spoke on Friday evening about a possible rate hike in July and substantial reductions to bond purchases. Chinese markets remained mixed after yesterday’s slew of negative data. The focus now is on whether there will be changes to the Loan Prime Rate (their main consumer lending rate) on Thursday.

Energy started to gain some pace yesterday, with WTI crossing $80/bbl for the first time in weeks. This morning, however, we’re seeing a marginal pullback in price. Metals continue to pull back led lower by copper.

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