💎 Fed’s first rate cut since 2020 set to trigger market. Find undervalued gems with Fair ValueSee Undervalued Stocks

Day Ahead - Top 3 Things to Watch

Published 08/06/2019, 03:33 PM
Updated 08/06/2019, 05:35 PM
© Reuters.
CL
-
US10YT=X
-

Investing.com - Here's the top 3 things that could rock markets tomorrow.

1. Fed Speak, 10Y Treasury Auction in Spotlight

The economic calendar is thin, with Chicago Fed President Evans hosting a media chat on Wednesday, while the U.S. Treasury is set to auction off $27 billion in 10-year notes.

A speech from Evans due 12:00 PM ET (5PM GMT) comes as his St. Louis counterpart, James Bullard, on Monday said he feels further rate cuts “may be desirable” later this year.

U.S. Treasuries will likely come into focus Wednesday when the U.S. Treasury is set to auction off $27 billion in 10-year notes.

The US 10-Year yield, which broke below 1.7% overnight Tuesday for the first time since the fall of 2016, traded lower, finishing at 1.716, down from 1.736% on Monday.

Ahead of the auction, analysts outlined numerous tailwinds, including additional rate cuts by the Fed and easing from the European Central Bank that could prop up demand for the benchmark note - given other sovereign bonds like the German Bund are offering negative yields.

2. China Trade Data Due

Traders will look to China’s latest trade data report for an insight into the health of the world’s second largest economy, with both exports and imports forecast to show an accelerated decline.

China’s imports are expected to have declined by 7.6% year-on-year, steeper than the 7.3% decline in June, while exports is forecast to have declined by 2.2%.

The faster fall in imports than exports is expected to narrow the country’s trade surplus.

3. EIA Crude Inventory Numbers Eyed

The Energy Information Administration's (EIA) weekly petroleum report, due Wednesday, could prove a timely distraction as sentiment on oil prices has been hurt by escalating U.S.-China trade tensions.

The EIA is expected to report a draw in crude stockpiles of 1.167 million barrels for the week ended Aug. 5.

Crude oil futures fell 1.9% to settle at $53.77 a barrel after giving up intraday gains amid fears that a protracted US-China trade war would hurt global growth and heap further pressure on oil demand.

“China now realizes that if they use its currency as a weapon it will not just have to answer to the US but to all of the countries in the G20," said Phil Flynn at Price Futures. "Yet trade war fears are still stoking fears of weak oil demand. Oil is rebounding but it is still wobbly because it fears the potential trade war fallout."

U.S. weekly production, which remains near record highs of 12.2 million barrels a day, will likely also garner attention.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.