Tuesday, June 18–Jim Wyckoff’s Morning Markets Report
European and Asian stock indexes were mostly firmer overnight. The U.S. stock indexes are also pointed toward slightly higher openings when the New York day session begins.
Traders and investors worldwide are on central bank alert this week. European Central Bank President Mario Draghi gave a dovish speech on monetary policy today by saying the ECB could cut interest rates and/or expand its bond-buying program (quantitative easing). Draghi’s comments came as dour trade data was released from the Euro zone today.
The Federal Open Market Committee (FOMC) meeting begins this morning and ends Wednesday afternoon with a statement. Most believe the Fed will not raise interest rates at this meeting, but FOMC members may lean toward a more dovish stance on monetary policy, to set the table for a rate hike in the coming few months. The Bank of Japan also holds its regular monetary policy meeting this week.
Meantime, the yield on the benchmark German government 10-year bond fell to a record low of -0.299% today. World government bond yields are declining amid very low inflationary pressures in major economies and on slowing world economic growth.
Geopolitics is still near the front burner of the marketplace this week. The U.S.-Iran tensions have been ratcheted up a notch as the U.S. is sending 1,000 more troops to the Persian Gulf region to bolster is task force that is already patrolling waters. Iran’s government on Monday said it is producing more enriched uranium that could be used in a nuclear weapon.
The price of Bitcoin has surpassed $9,000 this week and hit a 13-month high. Facebook is launching its own crypto currency, which gives the cryptos more legitimacy.
The key “outside markets” today see Nymex crude oil prices weaker and trading around $51.50 a barrel. Meantime, the U.S. dollar index is firmer in early U.S. trading.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, and new residential construction.