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Pivotfarm Daily News Harvest 28th June 2010


  • Asian Markets closed mixed over night with Japan, China and Australia falling but other Asian markets gaining ground.
  • European markets are up moderately across the board at lunchtime GMT.
  • European bond yields increased as new bonds were offered and investors sought more risk in the equity markets.
  • The GBP continues its advance against the USD making new 1 month highs.
  • The JPY trades very close to its 3 month highs against the USD.
  • It is a mixed day in the commodities markets. Oil is trading lower while Gold is trading higher. Coffee reaches a 12 year peak.
  • G20 leaders agree to halve deficits by 2013. Economic policies were decided to be "differentiated and tailored" for each country.
  • The markets lack real direction in Monday trading after the G20 meeting. The FTSE All-World index is up 0.4%.
  • US equity futures are trading slightly higher indicating a slight gain in the equity markets at the open.

Leaders at the G20 summit in Toronto, Canada over the weekend came to some agreements about future policies. The markets have taken the weekends information indecisively and trading is mixed around the world on Monday. The Leaders came to a decision that deficits should be cut by 50% by 2013, but Barrack Obama cautioned that countries should also focus on growth of domestic consumption.  G20 leaders were also in agreement on an increase in capital requirements for banks, to prevent a repeat of the liquidity crisis. The reforms are expected to increase the amount of capital banks are required to hold along with an increase in the quality of the capital. These reforms are not expected to be introduced immediately and may be brought in over the next few years.


Released This Morning– Personal Income and Outlays

Personal Income - M/M change

Previous                              0.4 %                     Consensus Range            0.3 % to 0.6 %

Consensus                          0.5 %                     Actual                                   0.4 %

Consumer Spending - M/M change

Previous                              0.0 %                     Consensus Range            -0.2 % to 0.3 %

Consensus                          0.2 %                     Actual                                   0.2 %

Core PCE price index - M/M change

Previous                              0.1 % Consensus Range            0.1 % to 0.1 %

Consensus                          0.1 %                     Actual                                   0.2 %

After personal income posted a 0.4% increase in the past 2 months the same figure again has been repeated and is 0.1% under consensus. This under consensus figure should be bearish on the markets as it shows worse than expected economic data.  The consumer spending monthly change is the same as consensus and is an increase over last months figure which showed no change from previous. The core PCE price index has come in higher than expected. This release of data should be slightly bearish on the markets when the open at 0930ET.

Disclosure: no positions