With another day of little otherwise completely irrelevant macro news (because following last night’s abysmal Australian jobs data one would think the AUD would be weaker; one would be wrong), market participants – all 3 of them – and algos (which have finally uncovered where Iraq is on google maps) are finally turning their attention to the latest conflict in Iraq (because they obviously no longer care about the martial law in Thailand or the civil war in Ukraine), where the Al Qaeda spin off ISIS overnight seized at least 310K B/D in refinery capacity in northern Iraq according to the Police, and what is more concerning, is now less than a 100 kilometers away from Baghdad. Will ISIS dare to venture further south? Keep an eye on crude for the answer.
More importantly the world cup begins today which means another day of near record low volumes, and thus constant “market” levitation, especially now that the US-hours USDJPY rigging team (must.keep.above.102) is around, is assured.
In Asia, a number of bourses have retreated from their recent highs overnight with the Nikkei (-0.8%) and HSCEI (-0.7%) being the main laggards. Volumes are again fairly low ahead of China’s latest industrial production and retail sales data which will be released tomorrow. There are more reports from domestic Chinese media that the PBoC could expand its use of targeted RRR cuts to support the economy (Securities Journal) amid chatter that  tomorrow’s Chinese data could disappoint. In Japan, the BoJ begins its two-day policy meeting today and the discussion around potential BoJ exit strategy has again popped up. Bloomberg is reporting today that BoJ officials could adopt a strategy of maintaining the size of its balance sheet after it reaches the 2% inflation target, using cash flow from maturing assets to buy longer term JGBs. The article says that the BoJ wants to avoid a spike in yields if asset purchases were to abruptly cease given that the BoJ’s assets are now equivalent to half the size of GDP.
European stocks trade little changed as U.S. index futures rise with oil. Asian stocks fall from 6-yr highs. U.S. to report initial jobless claims, retail sales later today.
- S&P 500 futures up 0.1% to 1945.2
- Stoxx 600 little changed at 347.9
- US 10Yr yield up 1bps to 2.65%
- German 10Yr yield unchanged at 1.4%
- MSCI Asia Pacific down 0.3% to 144.1
- Gold spot up 0.1% to $1261.8/oz
EUROPE
- 13 out of 19 Stoxx 600 sectors rise; media, tech outperform, basic resources, autos & parts underperform
- 45.7% of Stoxx 600 members gain, 51.5% decline
ASIA
- Asian stocks fall with the Sensex outperforming, Nikkei underperforming.
- MSCI Asia Pacific down 0.3% to 144.1
- Nikkei 225 down 0.6%, Hang Seng down 0.4%, Kospi down 0.1%, Shanghai Composite down 0.2%, ASX down 0.5%, Sensex up 0.2%
- 2 out of 10 sectors rise with telecom, utilities outperforming and information tech, finance underperforming
Bulletin headline summary from RanSquawk and Bloomberg
- Treasuries extend losses seen since the start of June, 10Y yield just below 2.665% 100-DMA before week’s auctions conclude with $13b 30Y.
- Bonds to be sold today yield 3.473% in WI trading vs. 3.440% in May; 10Y were awarded at 2.648% at yday’s auction, 0.8bp above WI yield at 1pm according to Stone & McCarthy
- Islamic militants’ sweep through northern Iraq and the collapse of the Iraqi army threaten to disrupt global oil markets and raise questions about Obama’s 2011 decision to withdraw all U.S. troops from Iraq and his reluctance to help arm moderate Syrian rebels
- 53% of Americans oppose the Affordable Care Act, Obama’s signature legislation, even as those saying it should be repealed fell to 32%; only 26% of Americans say that the country is headed in the right direction, a Bloomberg National Poll showsÂ
- Iran’s oil exports have increased so far this year, according to Bloomberg calculations, a trend that threatens to violate U.S. sanctions on the Islamic Republic’s main source of revenue
- U.S. House Republican leaders, seeking a swift pivot from the surprising election defeat of Majority Leader Eric Cantor, are pressing for a quick vote of party unity in the anointment of his successor
- The Chinese agency that stockpiles strategic commodities is checking to ensure its copper purchases are free of    collateral risks amid an investigation of metals at Qingdao Port, said people with knowledge of the matter
- China’s new yuan loans and money supply topped estimates in May as the government supports economic growth while reining in shadow banking
- New Zealand’s central bank raised interest rates for the third time this year and signaled more tightening to come as the Christchurch rebuild and surging immigration fuel growth, sending the kiwi higher
- Sovereign yields mixed. EU peripheral spreads tighten. Asian equities fall; European equity markets, U.S. stock futures gain. WTI crude and gold higher, copper lower
