Morning Notes

26/03/2019 - Argonaut Morning Note

A rally in US Treasuries sent benchmark yields briefly below 2.4% for the first time since December 2017. Stocks were mixed and the USD retreated. The Dow Jones and S&P 500 gained and lost 0.1% respectively.; Theresa May is braced to lose control over the Brexit process after conceding she doesn’t have the votes to get her unpopular divorce agreement sanctioned in Britain’s Parliament; The end of the first quarter is close and commodities are set for a solid showing. Supply-side constraints are driving prices higher, with OPEC’s curbs fuelling crude’s rally and palladium’s deficit spurring record prices. Still, the demand side is on unstable ground as markets grapple with China’s softer growth, the trade war, and concerns about a U.S. recession; 

read more...

25/03/2019 - Argonaut Morning Note

Special Counsel Robert Mueller found no evidence of collusion with Russia but failed to exonerate President Trump on obstruction of justice even though AG William Barr said he didn’t find enough evidence to pursue an obstruction charge; The yield spread between 3-month US bills and 10-year treasury notes inverted for the first time since 2007 on Friday following weak European and U.S. manufacturing data, which also pushed 10-year German bund yields below zero; Global oil prices fell on Friday with traders worried about the outlook for global crude demand. Traders reacted to weak manufacturing data in Germany and France but supporting prices was data showing that the number of oil rigs in operation in the US fell to 12-month lows in the latest week; 

read more...

22/03/2019 - Argonaut Morning Note

U.S. equities reached a five-month high as investors reacted to a dovish stance by policy makers in the world’s largest economy. The dollar rebounded after a four-day slide, while government bonds stabilised; European leaders are considering offering Theresa May extra time to avert a disastrous no-deal Brexit next week. Leaders are debating an unconditional delay - postponing the risk of a messy divorce at least for a few weeks; Brazilian prosecutors are demanding additional safety steps at a large mine owned by Vale SA that has been shut since early last month, possibly complicating the resumption of iron ore production that was halted in the January; Spot gold fell from a three-week high as the dollar rebounded and U.S. equities extended gains. The S&P 500 Index crossed the 2,850 level amid a broad- based advance on Thursday, while the greenback rebounded from its worst loss since January; Oil hovered near a four-month high as a rising dollar capped crude’s rally. Futures fell 0.4 percent in New York, after climbing above $60/bbl a barrel on Wednesday for the first time since November;

read more...

21/03/2019 - Argonaut Morning Note

President Donald Trump said he’ll keep tariffs on China until he’s sure Beijing is complying with any trade deal, refuting expectations that the two nations will agree to roll back duties as part of a lasting truce to their trade war; Federal Reserve Chairman Jerome Powell said interest rates could be on hold for “some time” as global risks weigh on the economic outlook and inflation remains muted; Oil closed at a new high for the year in New York after the biggest withdrawal of crude in U.S. storage tanks since July signaled further tightening supplies; Iron ore futures tumbled in Asia after a Brazilian court ruled that Vale SA should be allowed to restart a major mine ordered shut in the aftermath of January’s deadly dam disaster; Nickel and zinc gained amid signs that Chinese developers may be spared from new property tax rules, easing demand concerns in the world’s biggest metals consumer;

read more...

20/03/2019 - Argonaut Morning Note

A rally in equities sputtered out after a report that U.S. and Chinese negotiators remain at odds on aspects of their current trade talks; Australia’s three-year bond yield dropped below the central bank’s policy rate for the first time since September 2016, underscoring how growth jitters are fuelling bets for interest-rate cuts globally; China’s economy is poised to stabilize in 2Q as stimulus starts to gain traction. A pickup in investment and retail sales suggests domestic demand is steadying. Weaker global demand continues to drag on industrial output; Copper futures gained for a third straight session amid persistent supply concerns and a jump in options trading in the metal; Palladium topped $1,600USD an ounce for the first time, and there’s little sign of the rally slowing as global supply tightens. The price of the metal - mainly used in auto catalysts in gasoline vehicles - has almost doubled from a recent low in August;

read more...