The Morning Hark - 27 June 2024
Today’s focus...Dull, dull, dull but Archegos saves the day
Dear Harkster Subscriber
As you will have seen, through some of our recent publications, we are building out our new product, HarksterAI. We believe that this is an exciting new chapter for the Harkster and we will be sharing more details with you in the coming months.
On that basis, we wish to announce that, as of 30 June, the Harkster Newsletter publications; TMH, Morning Call Script, Read on the Trading Floor and Saturday Hark Back, will cease to be published. The time spent writing and researching for the newsletters will be redirected towards building out and supporting HarksterAI.
Where relevant, refunds will be issued for any subscriber payments made for the period after 30 June. In addition, as of that date, the Harkster Research Inbox website will be decommissioned.
The first iteration of the HarksterAI offering is scheduled for late July. If anyone would like to hear more about this offering, and join the early adopter program, please email Hello@Harkster.com.
At this time we, at the Harkster, would like to thank you all for your support over the last few months and years. We hope that you have found the newsletters to be entertaining and a useful tool in your daily market’s routine. We’d finally like to wish you, the Harkster Subsrcibers, all the best for the future.
Overnight Highlights
Prices are at 6.15 BST/1.15 EST, with changes reflecting movement from midnight GMT
Oil - Oil off smalls in Asia with Brent and Crude Sept futures currently at 84.30 and 80 after yesterday’s weakness on the back of the stronger USD and the EIA data showing crude inventories rose surprisingly more than expected.
EQ - Asian equity markets soggy overnight with the Hang Seng and Nikkei futures off over one percent at 17,580 and 39,290 respectively on the back of weakness in the tech sector.
The US indicies off smalls with the S&P and Nasdaq futures now at 5528 and 19,940 respectively.
Gold - Gold off smalls in Asia with the August futures trading currently at 2310.
FI - US yields a touch firmer in Asia with the US2y futures trading at 4.75% whilst the US10y futures yield at 4.33%.
European yields firmed a touch yesterday with the German 10y closing at 2.45% and the Italian 10y yield at 3.99%.
UK gilt 10y at 4.14%.
FX - The USD flat in Asia with the USD Index currently at 105.92 after yesterday’s strong gains on the back of the JPY suffering as it hit its lowest level since 1986.
The majors now trading at; JPY, EUR and GBP 160.40, 1.0695 and 1.2635 respectively.
Today’s major FX option expiries we have in the EURUSD; $€4bn at 1.0700 and €3bn at 1.0650 so I guess the EUR will be rangebound! In USDCAD we see $3.5bn congregated in the 1.3675/1.3705 range.
Others - Bitcoin and Ethereum off smalls but a lot calmer than earlier in the week with the pair currently at 61,000 and 3375 respectively.
Macro Themes At Play
Recap
US New Home Sales for May were ugly continuing the woes of the sector. Lowest print since November at 619k.
Central Bank Speakers
ECB’s Rehn sees two further cuts in 2024 as reasonable. Market view of terminal at 2.25/2.5% is fair. Always knew that inflation would be a bumpy road.
Panetta claimed we are at a turning point in the monetary policy cycle. The ECB will pursue normalisation gradually and smoothly and should avoid any forward guidance. We shall be data dependent.
Kazaks felt the ECB would take rate cuts step by step and that there was no need to rush.
The Day Ahead
Japan Retail Sales for May printed overnight and saw a strong upside miss to 3% YoY with strong demand for retail products and department stores. This was the 26 month of growth as higher wages continue to feed through into the economy.
Morning highlight will be the Riksbank Meeting and Policy Report.
The afternoon sees the final reading for q1 US GDP so nothing market moving there expected.
Of course the Biden/Trump debate late this evening too.
Early doors Japan Data Dump with the Tokyo CPI the highlight.
One further point if you do nothing else today read all you can on the latest Archegos details of its demise. Fantastic stuff………Wall Street at its best!! GoatsRUs!
👏 If you found this briefing helpful, please show the desk some appreciation by giving it a ‘Like’ or a ‘Comment’ at the bottom of the page.
Stay on top of the latest market narratives throughout the day using our curated research & commentary channels on Harkster.com
Main Highlights Ahead
All times in BST (EST+5 / CET-1 / JST-9)
The main highlights for the day ahead ahead in terms of data and speakers:
Thursday
Riksbank Interest Rate Decision rates to remain on hold at 3.75% (08.30 BST)
Riksbank Monetary Policy Report (08.30 BST)
US Durable Goods Orders MoM May consensus -0.1% vs previous 0.7% (13.30 BST)
US GDP Growth Rate QoQ Final q1 consensus 1.4% vs previous 3.4% (13.30 BST)
US GDP Price Index QoQ Final q1 consensus 3.1% vs previous 1.7% (13.30 BST)
US GDP PCE Prices QoQ Final q1 consensus 3.3% vs previous 1.8% (13.30 BST)
US GDP Core PCE Prices QoQ Final q1 consensus 3.6% vs previous 2% (13.30 BST)
ECB Speakers
Kazimir (09.00 BST)
Early Friday
Japan Tokyo CPI YoY June consensus % vs previous 2.2% (00.30 BST)
Japan Tokyo Core CPI YoY June consensus 2% vs previous 1.9% (00.30 BST)
Japan Unemployment Rate May consensus 2.6% vs previous 2.6% (00.30 BST)
Japan Industrial Production MoM Prel May consensus 2% vs previous -0.1% (00.50 BST)
Japan Industrial Production YoY Prel May consensus % vs previous -1.8% (00.50 BST)
Good luck.
The information provided in this post is for general information purposes only. No information, materials, services, and other content provided in this post constitute solicitation, recommendation, endorsement or any financial, investment, or other advice. Seek independent professional consultation in the form of legal, financial, and fiscal advice before making any investment decision.