China GDP Miss & Fed Speak | Morning Express 07/15/22
Posted: July 15, 2022, 7:41 a.m.
- Retail Sales tops of a big week of data at 7:30 am CT.
- Yesterday, U.S. equity benchmarks began trading higher and the U.S. Dollar lower on the heels of comments from the Fed’s most hawkish members.
- Fed Governor Waller said, “you don’t want to overdo rate increases” and pointed to a 75-basis point hike, while emphasizing the significance of today’s Retail Sales.
- St. Louis Fed President Bullard said, “I advocate a 75-bp hike at the July meeting. It would be unprecedented to move to such a big rate hike twice in a row.”
- The odds between a 75 and 100-basis point hike are currently at 50/50
- NY Empire State Manufacturing and Michigan Consumer data, both fresh July, due at 7:30 and 9:00 am CT, respectively. Industrial Production for June is out at 8:15 am CT.
- Atlanta Fed President Bostic speaks at 7:45 am CT. Although he is not a 2022 voter, the influential committee member said Wednesday after CPI that “anything is on the table” when referring to a 75 or 100-basis point hike. It would be supportive to risk-assets if he leans on 75 in his comments.
- St. Louis Fed President Bullard speaks again at 8:00 am CT. Does Retail Sales change his thoughts?
- Deluge of data from China last night was mixed. Q2 GDP, after lockdowns, was worse than expected at -2.6% versus -1.5%, and Industrial Production YoY missed at 3.9% versus 4.1%, but improved from 0.7% in May. On the bright side, Fixed Asset Investment beat at 6.1% versus 6.0% and Retail Sales crushed at 3.1% versus -0.3%.
- China real estate sector is facing hurdles as homebuyers are refusing to pay mortgages, protesting developers who have not delivered presold homes.
- Evergrande, China’s second largest developer, has resumed construction of 59 property projects, involving 12,00 workers. This is good news.
- Keep a pulse on Italy. The President rejected Prime Minister Draghi’s resignation after losing support of Five Star Movement. Italian yields have settled in after jumping and the Euro is attempting to stabilize above Dollar parity.
- President Biden visits Saudi Arabia and looks to leave empty handed. Crude Oil firming up. What could he have really done?
E-mini S&P (September) / NQ (September)
S&P, yesterday’s close: Settled at Settled at 3793.25, down 11.25
NQ, yesterday’s close: Settled at 11,797.50, up 35.25
- Never settled below late June 30th – July 1st 3751.25-3744.50
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NQ (September)
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Crude Oil (August)
Yesterday’s close: Settled at 95.78, down 0.52
- Never settled below 94.85-95.47
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Gold (August) / Silver (September)
Gold, yesterday’s close: Settled at 1705.8, down 29.7
Silver, yesterday’s close: Settled at 18.225, down 0.969
- Dollar Index below 107.50 would help ignite a strong rebound in metals.
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Silver (September)
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