脱欧大戏加码，May成为史上第一个被判藐视议会的领导班子。美股先是承压于欧洲走势，于欧洲收盘后在美领导班子关于贸易的强硬言论合并压力下，再次深幅下跌。WH内部强硬派与温和派不同的声音越来越强，得有一方走人才能让市场舒服。
12.5.2018 Wed, Cloudy, Air Polluted
Summary：脱欧大戏加码，May成为史上第一个被判藐视议会的领导班子。美股先是承压于欧洲走势，于欧洲收盘后在美领导班子关于贸易的强硬言论合并压力下，再次深幅下跌。WH内部强硬派与温和派不同的声音越来越强，得有一方走人才能让市场舒服。
Euro Session:
Block report of UST future trade kept hit the screen all through Tokyo time while TY hit down another 2 bps. Asian stocks fell with American futures after Trump administration shed little light on the specifics of how Sino-American trade negotiations will progress. The yen advanced and stocks fell in Japan, Korea and Australia and fluctuated in China.
EU market opened mix fading the trade truce. As to budget, Di Maio and Salvini was said to be open to possible 2% deficit while Conte was saying he is not working on a deficit below 2%, though it should be read as a "negotiation headline". BTP implied volatility is bleeding lower as conciliatory budget news flow reduces the tail risks perception in the short term.
What''s dramatic is all about sterling''s rollercoaster ride. In the early session of London time, pound rallied on the news that EU said UK can withdraw article 50 unilaterally, which means UK can legally cancel Brexit. This could be the most positive development of year 2019 although market might take some time to digest the full implication. But soon after that, the market sensed the difficulty May could face. From 11:00 on, more and more headline hit the tape on "May may face contemp vote". Finally after EU cash closed, May was ordered to release the legal advice they received on Brexit. Her government lost a vote of 311-307 and was the first government in the history of parliament to be held in contempt.
As to yellow vest in burning Paris, France is reportedly freezing a divisive fuel tax after days of violent protest from Yellow Vest movement that killed 3innocents.
Economy data:
No
US Session:
UST curve flattened more in US session as both 2s5s and 3s5s probed further into inversion. The 30yr benchmark rallied over 11bp at the height of the rally, leading the way lower in yield as the inversion in the front-end may have triggered a further wave of positioning reduction in outstanding steepeners. US equities went lower moderately echoing their EU peers. But the moment that EU closed, equity sell-off took off in earnest. Earlier comments on the US – China trade deal weighed on risk appetite as remarks from both Trump and Kudlow each reminded that difficult negotiations remain ahead.A late bounce in equity markets had allowed USTs to close off their lowest, and flattest, levels of the session.
The divergence within WH''s team extracted more in New York time. Mnuchin said agriculture will be the first issue in US-China trade talks and that he expects them to “make a lot of progress” in the first 90 days. Reuters reported that we have made 1.2tn tn commitments on US made goods. If it''s true and should be carried out in 5 years(let''s assume), what can we buy to fulfill the target? High tech? Military? IC? LNG? Either is not big enough, or prohibited to export to us, headache!.Kudlow said if a deal with china is not reached, the US would increase tariffs from 10% to 25% and it is possible that there would be more tariffs added on.
As to Fed, Williams (voter) said that he does “continue to expect that further gradual increases” will “best foster” the achievement of the Fed’s goals. He also mentioned that inflation is near the Fed’s 2% target and wage growth shows signs of accelerating. What he said didn''t matter too much since the mindset of the market for Fed is they will definitely become more data-dependent.
Economy data:
No
Key Data And Events Ahead:
ECB’s Draghi speaks
FRA, DEU, EMU Markit PMIs
BoC policy rate decision
Beige Book, reference material for FOMC meeting this month !
Fed’s Quarles speaks
评论 (0)