US CREDIT OPEN-US futures flat ahead of Fed minutes
By John Balassi
NEW YORK, Aug 17 (IFR) - Summary of overnight events and Wednesday's main headlines:
Dow Futures: -21, S&P Futures: -0.75, Nasdaq Futures: -0.25
CDX IG.26: +0.4375 wider, CDX HY.26: -0.125 point lower
10-yr UST yield: 1.529% -2.3bp, 30-yr UST yield: 2.256% -2.1bp
EUR/USD: 1.1272 -0.04%
USD/JPY: 100.73 +0.45%
WTI Oil: $46.50 -0.17%
HEADLINES
Futures flat ahead of Fed minutes
U.S (Other OTC: UBGXF - news) . stock index futures were little changed on Wednesday as investors held off from making big bets ahead of the release of the minutes of the Federal Reserve's July policy meeting.
Dollar turns defense into attack
Revived bets on U.S. interest rate rises this year saw the dollar turn defense into attack on Wednesday and halted a red-hot run for oil prices and emerging markets.
Little sign of Brexit hit for UK labor
The number of people claiming unemployment benefit in Britain unexpectedly fell in July despite the shock decision by voters to leave the European Union, suggesting little immediate impact from Brexit on the labor market
Japan pinches pennies on rising yen
While previous bouts of strength in the yen have pushed Japanese manufacturers to shift production overseas, exporters are coping with the recent currency stresses by penny-pinching - turning off lights and cramming elevators in the hope that nothing more drastic will be needed before the tide turns.
Fed officials eye hike this year
The Federal Reserve is raising expectations for an interest rate rise this year, even as early as next month, after two policymakers on Tuesday said the economic stars now appear to be aligning despite weak U.S. economic growth in the first half of 2016.
Target (NYSE: TGT - news) cuts profit forecast
Target Corp's quarterly comparable sales fell more than expected and the retailer slashed its full-year profit forecast as it faces increased competition from online rivals and demand eases for clothes and electronics.
OVERNIGHT TREASURIES
* T-note futures post new low but holding 131-25+ from the 8th Aug
* Volume picks up at 200k as at 06:00 EST
* Minor resistance expected around 132-05 breakdown
* Curve flatter by around 1.5bp for 2s/30s as short end struggles again
* 10yr US/Germany holds 161bp ahead of trend at 157bp
* 10-year cash trades in 1.564% to 1.587% range
* USTs underperforming Germany by 0.4bp in the 10-year maturity compared to the previous London close
GLOBAL MACRO
* Market opens risk-off due to weaker corporate results
* Pressure mounts on Portugal rating says DBRS
* Brent Crude holds around $48 with doubts emerging that producers may tackle oversupply
* Shanghai Composite gains 0.01% as brokerage stocks rise on Hong Kong to Shenzhen connect scheme
* UK July Claimant Count -9.6k (exp 9.5k, prev 0.9K)
* UK June ILO Unemployment Rate 4.9% (exp 4.9%, prev 4.9%)
* UK June Avge Weekly Earnings 2.4% 3m/yy (exp 2.4%, prev 2.3%)
* UK June Avge Earnings (Ex-Bonus) 2.3% (exp 2.3%, prev 2.2%)
DATA
* 07:00 MBA Weekly Mortgage Application Indices
* 10:00 Atlanta Fed Business Inflation Expectations (Aug)
* 10:30 EIA Weekly Petroleum Status Report
EVENTS
* 13:00 FRB St. Louis's Bullard on the economy and monetary policy; St. Louis, MO
* 14:00 FOMC Minutes (from the July 26-27 meeting)
USD HIGH-GRADE SUMMARY
Number of deals priced on Tuesday: 5
Tuesay's issuance: US$5.45bn
Weekly issuance: US$7.275bn
*Monthly issuance: US$94.35bn
Quarterly issuance: US$188.950bn
2016 year to date issuance: US$902.317bn
2015 year to date issuance: US$893.452bn
2015 full year issuance: US$1.269trn
*New August monthly record
LIPPER FLOWS
For the week ended August 10 Lipper US Fund Flows reported the following:
- INVESTMENT-GRADE FUNDS NET INFLOW: US$2.518bn
- IG YTD NET INFLOW: US$25.790bn
USD HIGH-GRADE ACTIVE DEALS
none
USD HIGH-GRADE PIPELINE
Woori Bank, A2/A-, hired Bank of America (Swiss: BAC.SW - news) /Merrill Lynch, Citigroup (NYSE: C - news) , Commerzbank (Xetra: CBK100 - news) , Credit Agricole CIB, HSBC and Nomura to arrange fixed-income investor meetings that took place in the US, Europe and Asia from July 11 to July 20. (Reporting by John Balassi; Editing by Marc Carnegie)