North American News
US stocks close higher for the 2nd consecutive day
- Dow Industrial Average leads the way for the 2nd consecutive day
The Dow industrial average is leading the way to the upside for the 2nd consecutive day with a gain of nearly 0.93%. The NASDAQ index did lag, but all 3 major indices closed higher. The final numbers are showing:
- Dow industrial average rose 317 points or 0.93% at 34261.43
- S&P index rose 29.71 points or 0.67% at 4439.25
- NASDAQ index rose 75.21 points or 0.55% at 13760.69
US CPI Preview: Shelter and services CPI will be key
- Shelter is the largest component in the CPI (34%) calculation and is up 8.0% YoY
Tomorrow the US CPI data will be released at 8:30 AM.Although the numbers are not likely to impact the July Fed decision, it could be the difference between one more hike and no more hikes in 2023. Expectations shows:
- CPI MoM 0.3% versus 0.1% last month
- CPI ex-food and energy is expected to rise by 0.3% versus 0.4% last month
- CPI YoY is expected to fall sharply to 3.1% from 4.0%. This is as a result of base effects. More specifically a year ago, the CPI increased by 1.3%. That number will drop out of the equation and be replaced by a much lower number. If the MoM number increases by 0.1% or less, the YoY could see a sub-3.0% level
- CPI ex-food and energy is expected to dip to 5.0% from 5.3%. The MoM from a year ago was 0.7%. Like the headline, a MoM gain of 0.2% or 0.1% (or lower) could see a YoY of less than 5%.
Services less energy rose by 6.6% YoY last month. That component of CPI accounts for 58% of the CPI calculation. The biggest component of that calculation is the Shelter component (34.56% of total CPI). Shelter is up 8.0% on the year and rose by 0.6% last month.
U.S. Treasury auctions off $40 billion of three-year notes at a high yield of 4.534%
- WI level at the time of auction 4.532%
- High yield 4.534%
- Tail 0.2 basis points versus the six-month average of 0.3 basis points
- Bid to cover 2.88X versus the six-month average of 2.56X
- Dealers 10.8% versus the six-month average of 16.9%
- Directs 19.8% versus the six-month average of 18.6%
- Indirect 69.4% versus the 6-month average of 64.5%
US June NFIB small business optimism index 91.0 vs 89.4 prior
- Latest data released by NFIB – 11 July 2023
- Prior 89.4
US Redbook YoY w/e falls -0.4% vs +0.7% last week
- Weekly US Redbook sales for the current week
The US Redbook sales data for the current week fell by at -0.4% versus 0.7% last week.
Speaking of the sales, the Amazon prime day begins today and continues tomorrow. Get shopping people.
Commodities
Gold consolidates above the 20-day SMA ahead of US CPI
- XAU/USD rose past the $1,930 level on Tuesday, piercing through the 20-day SMA at $1,926.
- Markets expect headline CPI to drop to 3.1% YoY in June and the Core to 5%.
On Tuesday, Gold spot gained ground and consolidated above the 20-day Simple Moving Average (SMA) for the first time since May. Ahead of key US Consumer Price Index (CPI) figures on Wednesday, US yields are declining giving room to the non-yielding metal to advance.
WTI crude oil futures settle at $74.83
- Up $1.84 or 2.52%
The price of WTI crude oil futures is settling at $74.83.The close settled up $1.84 or 2.52%. The high price today reached $74.93. The low price was at $72.98.
The close today to the price above the 100-day moving average at $73.74.It’s the 1st close above that moving average level since April 28 (that break above the 100-day moving average lasted for one day).
The next target comes against the June 5 high at $75.06. Above that and traders will start to target the 200-day moving average at $77.38.
EIA: World oil demand forecast to rise by 170K BPD to 1.76M BPD YoY
- EIA demand/supply numbers
The EIA is out with forecasts for supply and demand.
- EIA 2023 world oil demand growth forecast raised by 170k BPD to 1.76mln BPD Y/Y,
- 2024 forecast demand cut by 60k BPD to a 1.64mIn BPD Y/Y .
Production:
- 2023 US Dry Natural Gas production seen at 102.35 BCFD (prev.102.74 BCFD in June).
- 2024 US Dry Natural Gas production seen at 102.40 BCFD (prev.103.04 BCFD).
- US crude oil production to rise 57k BPD to 12.56mln BPD in 2023 (prev.78k BPD rise).
US Consumption:
- 2023 US Natural Gas consumption seen at 89.02 BCFD (prev.88.64 BCFD) .
- 2024 US Natural consumption seen at 87.81 BCFD (prev. 86.59 BCFD).
- US total petroleum consumption to rise 400k BPD to 20 8mln BPD in 2024 (prev.300k BPD rise).
- Expect record-high Natural Gas consumption in US for electricity generation in July.
EIA expects crude oil prices to reach USD 80/bbl in Q4 ’23.
OPEC+ needs to deepen oil output cuts to offset non-OPEC supply growth – JP Morgan
- The firm says that OPEC+ needs to do more in order to balance out the market
JP Morgan says that the oil cartel will need to deepen output cuts by another 0.7 mil bpd in the second-half of the year, in addition to the announced reductions. That cut will need to be extended into 2024 in order to offset both non-OPEC supply growth and rising output from some non-core OPEC members itself.
EU News
European major indices close higher
- UK FTSE 100 near unchanged but marginally higher
The European major indices are all closing with gains.The France’s CAC led the way with a rise of 1.10%.The UK FTSE 100 eked out a small 0.06% rise.
The closing levels shows:
- German DAX +0.73%
- Frances CAC +1.10%
- UK’s FTSE 100 +0.06%
- Spain’s Ibex +0.81%
- Italy’s FTSE MIB +0.66%
UK June payrolls change -9k vs 23k prior
- Latest data released by ONS – 11 July 2023
- Prior 23k; revised to 20k
- May ILO unemployment rate 4.0% vs 3.8% expected
- Prior 3.8%
- May employment change 102k vs 125k expected
- Prior 250k
- May average weekly earnings +6.9% vs +6.8% 3m/y expected
- Prior +6.5%; revised to +6.7%
- May average weekly earnings (ex bonus) +7.3% vs +7.1% 3m/y expected
- Prior +7.2%; revised to +7.3%
Germany July ZEW survey current conditions -59.5 vs -60.0 expected
- Latest data released by ZEW – 11 July 2023
- Prior -56.5
- Outlook -14.7 vs -10.5 expected
- Prior -8.5
Germany June final CPI +6.4% vs +6.4% y/y prelim
- Latest data released by Destatis – 11 July 2023
- HICP +6.8% vs +6.8% y/y prelim
ECB’s Villeroy: We are close to the peak of interest rates
- Remarks by ECB policymaker, Francois Villeroy de Galhau
- Once we hit the peak, we will need to stay at that level for a while
- We are starting to have good news on inflation
- Inflation will continue to decline and will be back at 2% by 2025
Other News
China June M2 money supply +11.3% vs +11.2% y/y expected
- Latest Chinese credit data for June 2023 has been released
- Prior +11.6%
- New yuan loans ¥3.05 trillion vs ¥2.34 trillion expected
- Prior ¥1.36 trillion
Indonesia seizes Iranian-flagged tanker suspected of illegal trans-shipment of oil
Indonesia’s coast guard (Bakamla) said on Tuesday it has seized an Iranian-flagged tanker suspected of involvement in the illegal trans-shipment of crude oil.
- The vessel, MT Arman 114, was carrying 272,569 metricc tons of light crude oil and was suspected of transferring the oil to another vessel without a permit, the coast guard said in a statement.
Microsoft wins US court nod to buy Activision
- This would be a loss for the FTC
Bloomberg is reporting that Microsoft wins the US nod to buy Activision. The decision would be a loss for the FTC which tried to stop the deal.
Meanwhile in the UK, their regulatory agency has blocked the deal. So the deal has still a long way to go.
Cryptocurrency News
UK financial regulator shuts down 26 illegal cryptocurrency machines
The UK’s Financial Conduct Authority shut down 26 machines across the country for illegally offering cryptocurrencies.
The action came after a member of the public paid in a thousand GBP into a crypto ATM in an attempt to buy cryptocurrencies, but no cryptocurrency or funds were returned.
Says an FCA official:
- “If you use a crypto ATM in the UK, you are using a machine that is operating illegally and you may be handing your money over to criminals”
- “You will not be protected if something goes wrong, and you could lose your money”
US SDNY attorney files first ever DEX-operated smart contract criminal case, $9M stolen from Solana-based DEX
- US SDNY Attorney files pioneer criminal case, $9 million worth of crypto stolen in Solana-based crypto exchange attack
- US Attorney Damian Williams has announced the first-ever criminal case involving a DEX-operated smart contract.
- Shakeeb Ahmed, the accused, leveraged his industry expertise to defraud the exchange and its users.
- The senior security engineer at an international technology company used flash loans, among other tactics, looted ≈ $9 million.
A New York district attorney has announced a pioneering criminal charge in the cryptosphere, catching the interest of market players as nostalgia for racketeering, fraud, and deceit boils over. Based on the announcement, US Attorney for the Southern District of New York (SDNY) Damian Williams has brought the first criminal charges ever involving an attack on a smart contract in the decentralized cryptocurrency exchange (DEX) sector.
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