- Asian markets fell overnight as fears that China’s recovery is slowing. Shanghai composite was down 4.3%.
- European markets are down across the board on Chinese worries.
- Bond yields decline as investors look for safety and less risk.
- Commodities are also hit. As a decline is seen in nearly all commodity futures.
- Oil futures drop around 2.5%.
- The USD strengthens as investors sought safety in the currency.
- The GBP continues to make yearly highs against the EUR.
- US equity futures are downs heavily before the open, indicating a day lead by the bears.
The conference board revised its prediction for Chinese growth down from 1.7% to 0.3%, this cut spooked wary investors as the world economic recovery may falter. The ECB’s funding programme is soon to expire and investors are worried that European banks may struggle to function without central bank help, this increase in European worries has hit the markets. Along with the recent bad US economic data this new information has sent shock waves through the markets and has meant investors have sought safety. The riskier assets of equities and commodities have seen a decline while the yield on Treasury Bonds has also seen a sharp decline. The day ahead looks to be one lead by the bears as trading becomes risk averse.
Coming up Today
0900ET – S&P/Case-Shiller HPI
The house price index released each month gives an indexed figure representative of house prices across the US. The figure released lags 2 months, so today’s figure is for house prices in April. An increase in house prices reflects a recovery in the housing market and in the general economy. If house prices rise the economy must be recovering, this will prove bullish for equities and the US Dollar.
1000ET – Consumer Confidence
Previous 63.3 Consensus 63.3
Consensus Range 61.0 to 65.0
The conference boards survey asks 5000 consumers across the US about present and future economic conditions. After a rise in the figure from April to May today’s figure for June is expected to make no further gains. Any figure that comes in above consensus will suggest stronger economic growth and should prove bullish in the markets.
Disclosure: no positions