24/06/19 Market Commentary

Kevin Jock

2nd July 2019

Markets reflecting a revised 50bp cut as base case for next FOMC in July.

Until then we have the G20 summit and June NFP number to be published. If a trade truce is coupled with a strong payrolls number I find it difficult to see Fed cutting so aggressively.

The 4 banks (Citi, GS, MS, UBS) in above FT snippet may share this indecisive view. The bond market does know best (perhaps more so then any other) so we’re in for an interesting few weeks.

Across the wider portfolio we are seeing bids surface in gas markets and no one offering iron ore! OPEC’s big 3 (Saudi, Iraq, UAE) have confirmed output curbs for rest of year as demand is faltering. WTI front month is up nearly 3% so far today in reaction. Gold is at its highest level in 5 years on back of last nights dovish indications. Coffee and Corn opening firmer, Soybeans and Sugar soft. Not much on the fundamental side to speak of there, these markets still very much in the balance of China demand story.