SocGen

The Charade Continues: London Gold And Silver Markets Set For Even More Paper Trading

Today the London Metal Exchange (LME) and the World Gold Council (WGC) jointly announced the launch next year of standardised gold and silver spot and futures contracts which will trade on the LME’s electronic platform LMESelect, will clear on the LME central clearing platform LME Clear, and that will be settled ‘loco London’. Together these new products will be known as LMEprecious.’

World Stocks Drop For Third Day On Growing Concerns About Central Bank Policy, Tumbling Oil

After 7 consecutive drops in the Dow Jones, the Industrial average is set for an 8th decline with US equity futures modestly lower in the premarket as risk-averse sentiment persists overnight. Oil’s continued slide and recent plunge into a bear market, despite some stabilization this morning just south of $40, has finally rekindled global growth concerns, and is keeping a lid on bullishness. European stocks are little changed, while Asian stocks and S&P futures fall.

European Bank Stress Test Preview: What To Expect And How To Trade It

While the main event in today's European bank stress test was leaked moments ago, when Monte Paschi board member Turicchi said that the bank has finalized a bank consortium for a critical capital hike, suggesting that contrary to last minute jitters the bank has found the needed number of willing banks to provide €5 billion in fresh capital it needs resulting in the bank's 3rd bailout in the past 2 years - this one courtesy of the private sector - there may still be some surprises.

The Key Thing To Watch For In Today's FOMC Statement

The Fed is expected to stay on hold today. Given the Fed’s dovish reaction to the weak May employment report, SocGen expects that officials are likely to be reluctant to commit to any particular path just yet (despite the longest streak of economically positive surprise in US history). In the absence of any signal regarding the next hike, attention will fall on their characterization of the economy. Here are five things to watch in the statement...

What To Expect In Today's ECB Announcement: "Time To Send Another Dovish Signal"

Following the previously noted fireworks from Kuroda, who in a BBC interview said that there is "no possibility" of helicopter money (which however the WSJ quickly added was based on an interview conducted in mid-June which supposedly means there is possibility now) In under an hour the market will turn its attention to the ECB's latest statement, where as SocGen's Anatoli Annenkov writes, it is "time to send another dovish signal."

Why SocGen Thinks There Is Less Than 1% Chance That 10-Year Yields Will Fall Below 1.1%

SocGen has become the latest in a long and illustrious line of (so far wrong) forecasters, to predict that the 30-year-old bond rally is finally over. Using a new and improved "model", the French bank says that there’s less than a 1 percent chance U.S. 10-year yields fall below 1.1% especially as the Federal Reserve moves to raise interest rates. "Our analysis shows a roughly an adjusted fair value for the 10yT of 1.95%." Here's why.

Kyle Bass Was Right: Here Is SocGen's Primer How To Trade The Biggest Yuan "Depreciation Wave" Yet

The new risk scenario for CNY is 8.0 (20% increase in USD-CNY). The caveat is that the pain threshold for the market appears to be much higher than before and the implications for the global financial markets will primarily depend on the speed of depreciation. We believe that it would take significantly more pressure on capital flows than what we have seen over the past few years, or an economic hard landing, for our risk scenario to unfold.

Your Last Minute Payrolls Preview

  • US Change in Nonfarm Payrolls (June) M/M Exp. 180K (Low 50K, High 243K, Prey. 38K, April. 160K)
  • US Unemployment Rate (June) M/M Exp. 4.8% (Low 4.7%, High 4.9%), Prey. 4.7%, April. 5.0%
  • US Average Hourly Earnings (June) M/M Exp. 0.2% (Low 0.1%, High 0.3%), Prey. 0.2%, April. 0.3%

Frontrunning: July 6

  • For Hillary Clinton, Political Fight Over Emails Is Far From Over (WSJ)
  • More "Extreme carelessness" - Iraq inquiry slams Blair over legal basis for war (Reuters)
  • FBI Director Rebukes State Department Over Security Practices (WSJ)
  • Gold Climbs to Two-Year High as UBS Sees Start of New Bull Run (BBG)
  • Stocks and bond yields sink as growth fears set in (Reuters)

"We've Never Had A Shock To The System Like This" - Global Selloff Accelerates On Brexit, Italy, "Unknown" Fears

The flight to safety following last week's quarter-end window dressing is accelerating, with constant news and flashing red headlines of record low yields across DM government bonds once the norm, and as of moments ago Denmark's 10Y bonds joined the exclusive club of sub-zero yields; gold has soared to fresh multi-year highs above $1,370, the risk-off currency, the Yen, soaring and sending the USDJPY just above 100, while sterling crashed overnight once again below 1.27, levels not seen since 1985.