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US Market Update TRADETHENEWS.COM STAFF
Greece Election Fallout Roils Global Markets
DJIA -23 S&P500 -3.7 NASDAQ +8
Economic Data
- (CA) Canada Apr Intl Securities Transactions (CAD): 10.2B v 5.0Be
- (RU) Russia May Industrial Production Y/Y: 3.7% v 1.7%e
- (BE) Belgium Jun Consumer Confidence: -10 v -10 prior
- (US) Jun NAHB Housing Market Index: v 28e
- (EU) ECB completed €0.0M (nil) vs. €0.0M prior (nil) in weekly settlements in its Govt Bond Purchase program (SMP)' To drains €210.5B in next 7-day Term Deposit Tender
- Trading in global equity markets has been highly volatile since the Greek election results came out on Sunday. The optimism about New Democracy's victory has been even shorter-lived than anyone expected, with European markets giving up substantial initial gains to trade flat or negative. Most disturbingly, yield on the 10-year Spanish bond broke above 7% around 04:00ET and has stayed there ever since, prompting rumors that the ECB was checking rates ahead of a possible resumption of bond buying after 13 weeks of dormancy. There were also hints that the Germans may be softening their resistance to lengthening the term of Greece's austerity measures, although officials once again highlighted that this would likely require another bailout. This prompted reports in the Irish press, later denied, that the Troika was also looking to extend the repayment schedule for Ireland. US indices pared earlier losses before returning to negative territory. Note that the VIX is down around 6% this morning, dropping below 20, on pace to close below 20 for the first time in a month. After trading briefly above 1.2740 yesterday, EUR/USD isd around 1.2560 in mid-morning trade.EUR/JPY cross tested below 99.50.
- Solar power names are up sharply this morning after the Japanese Industry Ministry approved new feed-in tariffs for renewable energy sources, to take effect July 1st. Japan's utilities will pay ¥42 per kilowatt hour (kwh) for electricity generated by solar power, double the tariff offered in Germany and more than three times that paid in China. They will pay ¥23.1 per kwh for electricity generated by wind power. Shares of FSLR had risen as much as 8% on the story, plus some positive analyst commentary, before giving up gains. Other major solar names are up 2% to 4%.
- Steel names AK Steel and Steel Dynamics are moving on Q2 guidance calls. After guiding well below consensus estimates on Friday, STLD fell more than 2% in the premarket, opened up down and then shot up to +2% before leveling out at unchanged. AK Steel's Q2 guidance was also very weak, and shares of NUE are down a solid 4%. Both firms cited similar trends as Nucor last week with its weak guidance. In its release, Steel Dynamics stated that decreased sheet steel pricing attributable to supply-side pressures from increased imports and increased domestic steel capacity reduced the company's earnings.
Looking Ahead
- (ES) Independent audit on Spanish banking sector could to be released ahead of G20 Summit
- (IR) EU's Ashton Leads Iran Nuclear Negotiations in Moscow
- 11:00 (US) Fed to purchase $1.50-2.25B in Notes
- 11:30 (US) Treasury to sell $30B in 3-Month and $27.0B in 6-Month Bills
- 14:00 (MX) G20 Leaders Summit in Los Cabos, Mexico
- 14:00 (US) Fed to sell US8.00-8.75B in Notes
Economic Data
- (CA) Canada Apr Intl Securities Transactions (CAD): 10.2B v 5.0Be
- (RU) Russia May Industrial Production Y/Y: 3.7% v 1.7%e
- (BE) Belgium Jun Consumer Confidence: -10 v -10 prior
- (US) Jun NAHB Housing Market Index: v 28e
- (EU) ECB completed €0.0M (nil) vs. €0.0M prior (nil) in weekly settlements in its Govt Bond Purchase program (SMP)' To drains €210.5B in next 7-day Term Deposit Tender
- Trading in global equity markets has been highly volatile since the Greek election results came out on Sunday. The optimism about New Democracy's victory has been even shorter-lived than anyone expected, with European markets giving up substantial initial gains to trade flat or negative. Most disturbingly, yield on the 10-year Spanish bond broke above 7% around 04:00ET and has stayed there ever since, prompting rumors that the ECB was checking rates ahead of a possible resumption of bond buying after 13 weeks of dormancy. There were also hints that the Germans may be softening their resistance to lengthening the term of Greece's austerity measures, although officials once again highlighted that this would likely require another bailout. This prompted reports in the Irish press, later denied, that the Troika was also looking to extend the repayment schedule for Ireland. US indices pared earlier losses before returning to negative territory. Note that the VIX is down around 6% this morning, dropping below 20, on pace to close below 20 for the first time in a month. After trading briefly above 1.2740 yesterday, EUR/USD isd around 1.2560 in mid-morning trade.EUR/JPY cross tested below 99.50.
- Solar power names are up sharply this morning after the Japanese Industry Ministry approved new feed-in tariffs for renewable energy sources, to take effect July 1st. Japan's utilities will pay ¥42 per kilowatt hour (kwh) for electricity generated by solar power, double the tariff offered in Germany and more than three times that paid in China. They will pay ¥23.1 per kwh for electricity generated by wind power. Shares of FSLR had risen as much as 8% on the story, plus some positive analyst commentary, before giving up gains. Other major solar names are up 2% to 4%.
- Steel names AK Steel and Steel Dynamics are moving on Q2 guidance calls. After guiding well below consensus estimates on Friday, STLD fell more than 2% in the premarket, opened up down and then shot up to +2% before leveling out at unchanged. AK Steel's Q2 guidance was also very weak, and shares of NUE are down a solid 4%. Both firms cited similar trends as Nucor last week with its weak guidance. In its release, Steel Dynamics stated that decreased sheet steel pricing attributable to supply-side pressures from increased imports and increased domestic steel capacity reduced the company's earnings.
Looking Ahead
- (ES) Independent audit on Spanish banking sector could to be released ahead of G20 Summit
- (IR) EU's Ashton Leads Iran Nuclear Negotiations in Moscow
- 11:00 (US) Fed to purchase $1.50-2.25B in Notes
- 11:30 (US) Treasury to sell $30B in 3-Month and $27.0B in 6-Month Bills
- 14:00 (MX) G20 Leaders Summit in Los Cabos, Mexico
- 14:00 (US) Fed to sell US8.00-8.75B in Notes
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