- US May durable goods orders +0.7% vs +0.1% expected
- US May pending home sales +0.7% vs -3.7% expected
- Dallas Fed June manufacturing index -17.7 vs -7.3 prior
- Atlanta Fed GDPNow +0.3% vs 0.0% prior
- US 5-year auction 3.271% vs 3.236% WI
- US sells 2-year notes at 3.084% vs 3.077% WI
- OPEC+ trims estimate of oil surplus in 2022 to 1 mbpd from 1.4 mbpd
- Bitcoin falls as SEC chairman warns on fraud and manipulation
- G7 statement: Leaders agreed to explore options for decarbonising
- Macron overheard at G7: Saudi Arabia and UAE barely have any spare oil capacity
- UAE tries to spin the report that it's maxed out of spare capacity
Markets:
- Gold down $4 to $1822
- US 10-year yields up 7.6 bps to 3.25%
- WTI crude oil up $2.35 to $109.90
- S&P 500 down 11 points to 3900
- EUR leads, AUD lags
We're into quarter end and that makes explaining any of the moves more challenging. The tail in the 10-year sale was the worst since 2010 and at times this year that would have crushed bonds and sentiment but the market collectively shrugged and pointed to the calendar.
The main economic news was durable goods and that could have led to a revisions to the Atlanta Fed tracker into negative territory but it was strong. That also pushed up yields and caused somewhat of a slump in risk assets while temporarily buoying the dollar.
The euro and pound both rallied into the London fix but those moves unwound later in another sign of flows dominating fundamentals at the moment. The euro did manage to touch the highest since June 10, briefly trading above the recent range before falling back below 1.06.
The loonie got some help from oil to outperform its commodity cousins. The drama around the UAE comments on spare capacity made for an interesting discussion around how much spare capacity exists in the world, if any.
