The levitation continues with S&P futures pointing to - what else - another higher open while European stocks swung between gains and losses on the busiest earnings days of the year (85 of the Stoxx 600 report) which has seen European pharma giant AstraZeneca plunge 15%, the most on record, after its flagship lung cancer trial Mystic failed to show benefits, while Deutsche Bank slumped 4% on a 12% plunge in FICC revenue. Asian shares rose spurred by results and alongside a surge in China's small-cap ChiNext index which surged 3.6%, its biggest one day gain since last August, after earnings reports revealed that the Chinese "National Team" aka PPT had bought 2 ChiNext shares...
Europe's Stoxx Europe 600 Index fluctuated before edging lower amid the wave of company reports, with the likes of Nokia and BASF beating estimates but Deutsche Bank and Airbus disappointing. The Stoxx Europe 600 Index declined 0.1 percent. The U.K.’s FTSE 100 Index decreased less than 0.1 percent. Germany’s DAX Index fell 0.5 percent. The MSCI Emerging Market Index rose 0.9 percent to the highest in about three years.
In Asia, solid earnings from giants Samsung and Nintendo helped the MSCI Asia Pacific Index to the highest since December 2007. Japan’s Topix index rose 0.4 percent, while Australia’s S&P/ASX 200 Index added 0.2 percent. South Korea’s Kospi index climbed 0.4 percent. In Hong Kong, the Hang Seng Index added 0.7 percent, while the Shanghai Composite Index added 0.1 percent.
Meanwhile, the MSCI's 47-country All World share index cheered its latest record high.
The big story remains the relentless drop in the greenback which however may have paused for the time being, with the Bloomberg Dollar Spot Index paring an earlier drop, but still trading near the lowest in more than a year after the Fed once again surprised on the dovish side by altering its wording around inflation, suggesting recent inflationary weakness may be more persistent than expected...
"The dollar's biggest problem is it can't expect help from the Fed for a long time," said Alan Ruskin, global head of forex at Deutsche Bank. "In the short term we are still in a risk-favorable loop, whereby subdued goods and services inflation supports a well-behaved bond market and asset inflation. It's just another day in paradise."
Elsewhere in currencies, the yen traded at 111.35 per dollar, while the Aussie extended gains above 80 US cents, rising 0.4 percent after jumping 0.9 percent Wednesday. The Bloomberg Dollar Spot Index dipped less than 0.05 percent to the lowest in about 15 months as of 9:40 a.m. in London. The euro declined 0.1 percent to $1.1727. The British pound rose 0.1 percent to $1.3138, the strongest in more than 10 months. The Swiss franc decreased 0.3 percent to $0.9542, the weakest in more than a week.
Oil prices paused near eight-week highs after a surprisingly sharp drop in U.S. inventories encouraged speculation a global crude glut would recede.
A bout of profit-taking saw Brent crude futures ease 7 cents to $50.90 a barrel, while U.S. crude dipped 5 cents to $48.70.
In rates, Germany’s 10-year yield decreased five basis points to 0.52 percent. France’s 10-year yield fell four basis points to 0.772 percent. Britain’s 10-year yield declined four basis points to 1.191 percent.
Economic data include jobless claims, durable goods orders. Scheduled earnings include Amazon, Procter & Gamble, Comcast, Verizon, Intel. U.S.
# Market Snapshot;
- S&P 500 futures up 0.2% to 2,477.75
- Nikkei up 0.2% to 20,079.64
- Topix up 0.4% to 1,626.84
- Hang Seng Index up 0.7% to 27,131.17
- Shanghai Composite up 0.06% to 3,249.78
- STOXX Europe 600 down 0.08% to 382.44
- Brent Futures down 0.3% to $50.84/bbl
- Gold spot up 0.1% to $1,261.95
- U.S. Dollar Index down 0.2% to 93.52
# Top Overnight News;
- Deutsche Bank’s Trading Outlook Dims; AstraZeneca Plummets After Failed Trial; Big Oil Earnings Beat Across the Board
- Libor will be phased out by the end of 2021, as U.K. regulators and banks look to replace the scandal- tarred indicator with a more reliable system
- Senate Republicans who have promised to demolish Obamacare are swerving toward a bare-bones approach that might eliminate just a few pieces of the landmark health-care law
- Hedge funds which had built up an unprecedented bet against two-year U.S. notes in the futures market, left battered by the dovish Fed
- With House members planning to leave Washington Friday for a five-week recess, the lack of a budget is raising doubts that a tax rewrite, one of President Donald Trump’s top priorities, can get done this year, or even before the 2018 elections
- Schneider Electric SE agreed to buy U.S. power-systems maker ASCO Power Technologies for $1.25 billion as the French company expands in North America and seeks to offset falling sales at its infrastructure division
- Energy Capital Partners, the private equity firm that owns the largest stake in U.S. power generator Dynegy Inc., is now in advanced talks to buy its rival Calpine Corp.
- Apollo Global Management LLC amassed $24.6 billion for the largest fund ever raised by a leveraged-buyout firm, crowning a string of record-setting war chests as investors hunt for better returns
- Just four months into his latest turnaround plan, Deutsche Bank CEO John Cryan is already dialing back ambitions
- Viacom has dropped out of the bidding to buy Scripps; Discovery remains in talks for deal, WSJ reports
- Ex-PBOC adviser sees capital outflow as biggest potential threat: Caixin
- Moody’s changes China banking system outlook to stable from negative
- Japan doesn’t need fiscal stimulus, economic adviser Takahashi says
- Brazil cuts benchmark lending rate by 100bps to 9.25%
*) Asia equity markets were mostly higher following the US gains, where stocks marginally extended on advances amid earnings and following a somewhat dovish-perceived FOMC. As such, mild upside was observed in ASX 200 and Nikkei 225, with the former led by strength across the commodities complex. Elsewhere, Shanghai Comp. and Hang Seng. traded mixed with underperformance in the mainland bourse after the PBoC reduced its liquidity operations, while participants also digested mixed Industrial Profits data. 10yr JGBs were higher despite the mostly positive tone in the region, as yields tracked the declines in their US counterparts following the aforementioned FOMC, while today's 2yr auction results failed to impact prices as the results were mixed. China Industrial Profits in June rose Y/Y 19.1%, above May's 16.7%. The PBoC injected CNY 60bln 7-day reverse repos, while the PBoC set CNY mid-point at 6.7307 (Prey. 6.7529)
# Top Asia News;
- Noble Group Shares Collapse After Warning of $1.8 Billion Loss
- Glencore Is Said In Talks to Share Assets Yancoal Won From Rio
- India Said to Mull Allowing Funds to Lend Bonds in Repo Market
- Queensland Sees Adani Tapping Equipment Firms to Fund Giant Mine
- Japan’s Main Opposition Leader Resigns Amid Turmoil in Her Party
*) European equities are pretty choppy this morning with today being without a doubt the busiest session so far in Europe on the earnings front, as the majority of Europe's largest reported before the open. All eyes on AstraZeneca (-15%) as they look set for their worst day on record after initial reports in their lung cancer trial failed to meet primary objectives. Consequently, the healthcare sector underperforms noticeably with the sector slipping 1.5%. On a brighter note, AB InBev and Diageo are enjoying sizeable gains after firm financial results. EGBs higher this morning with the German curve slightly flatter this morning, notable activity has been seen going through in futures with reports of one black trade of 5k at 162.29 with some believing this to be a buyer of Bunds. The EU has warned that the next phase of Brexit negotiations will be delayed for two months because of the UK's refusal to engage with Brussels on the so-called 'Brexit divorce bill', according to the Telegraph. UK Home Secretary Rudd said the government would seek a transitional Brexit arrangement, which would likely to include free movement to avoid a "cliff edge" for employers or EU nationals in the country.
# Top European News;
- London Walkie Talkie Skyscraper Sells for a Record $1.7 Billion
- Macron Unleashes a Decade of Italian Anger Since Zidane Headbutt
- Price Shock Too Big to Ignore Seen Halting Russian Rate Cuts
- Norway Gas Outage Keeps EU Traders Busy Before Summer Lull
- U.K. Commissions Study Into Impact of EU Workers on Economy
# In currencies, USD selling continued last night post the FOMC meeting in which the central bank was slightly more downbeat on inflation. Subsequently, this prompt the USD sell-off to benefit major FX pairs, with the greenback at 2Y lows against the EUR. Notable size in the options market with 1.3bln worth of vanilla options situated at 1.17. Sweden are currently gripped by a political crisis after opposition parties called for a no confidence vote in PM Lofven's minority government (potentially for August) following handling of an IT out-sourcing deal. With suggestions that the option on the table were possibly for the PM to call a snap election EURSEK broke the early morning range of 9.5680-9.5870 to breach 9.6000. However, the weakness in SEK had been pared after the PM announced that he would reshuffle cabinet.
# Looking at the day ahead, we will see June data on durable (+3.7% mom expected) and capital goods orders (+0.3% mom expected) as well as wholesale inventories (+0.3% mom expected). We will also see jobless claims numbers and the Kansas City Fed’s manufacturing index (11 expected) due. Notable US companies reporting include: Intel, Western Digital, Dow Chemical, Mastercard, Procter & Gamble, Conocophillips and Amazon....