China has blocked US broadcaster HBO after talk show host John Oliver unfairly compared President Xi Jing Ping to Winnie the Poo. The central bank yesterday cut reserve ratio requirements, adding about 100 billion dollars to cushion the toll of the continuing trade war jitters. The Shanghai composite is down another point 7 of a percent, placing the index in its 4th bear market in 3 years. JAPAN’S leading economic index this morning showed a 2-point improvement at 106.2 in April and the Nikkei ended up point 6 of a percent to end at 22-325. Yesterday’s central bank report shows a consensus for continuing its easing program.
EuropeThe Turkish Lira was up yesterday on President Erdogan’s election victory. But analysts think the trend will be short-lived since an Erdogan victory also means the continuation of Erdogan rules. Also yesterday, German business confidence remained in the green despite a half point decrease. European equities are down this morning on expected US tariffs on cars, steel and aluminium. The DAX leads with a 2.5% drop with the FTSE next at minus 2 and a quarter. The EU has retaliated with tariffs of its own against 25 of US imports worth about $3.3bn.
USIn the US, 10 year bond yields are at a 3-week low, and indexes were down overnight after the Wall Street Journal and Blomberg reported limitations to Chinese investments. The DOW lost 330 points and the Nasdaq – 161, with the dollar index down to 93.86. While the Dallas Fed yesterday provided an optimistic 36.5, Chicago’s reserve bank provided negative guidance, as factory output slows. New home sales provided GOOD news last night, surging by nearly 50,000 units – a 6.7 increase over April’s 3.7% drop.
CommoditiesBrent oil continues to suffer the effects of OPEC’s decision to raise output by about a million daily barrels. The commodity is still just above the $74 mark but continues solidifying downwards. Gold was slightly up during the Asian session over dollar weakness and continued trade war worries.
SharesIn the corporate world, American Express (NYSE:AXP) added a percent and a third after the US Supreme Court ruled that it wasn’t in defiance of anti-trust rules; and Boeing (NYSE:BA) has won a $5.6 bn order of dreamliners. Its stock still fell 2.27% on Monday.
Events06:00 JPY BOJ Core CPI y/y
11:00 GBP CBI Realized Sales
12:45 USD Redbook Index
15:00 USD CB Consumer Confidence
20:00 OIL API Crude Oil Inventories
23:45 NZD Trade Balance