Good morning. The SPX is little changed after the ECB’s rate decision, but the Euro Stoxx 50 is down 0.4 percent, while oil remains elevated at 122 dollar per barrel.
Yields for German Bunds are exploding higher and are currently up over eight basis points at 1.445 percent. The equivalent Italian yield is up almost 15 basis points at 3.619 percent. The yield for 10-year Treasury Notes is up three basis points at 3.058 percent.
A UBS upgrade of Tesla is a supporting factor this morning in the US, also some better-than-expected May trade data out of China has been comforting.
However, there are reports that a southwest neighborhood in Shanghai has been locked down for COVID testing, and that entertainment venues in a Beijing district have been closed.
Over in Europe the ECB just announced that it has decided to leave its key interest rates unchanged, but the accompanying statement said the Governing Council intends to raise interest rates by 25 basis points at the July meeting and to end the net asset purchase program as well at that date.
Economic data
Gamma Discussion
As we have speculated yesterday, investors bought puts on Wednesday at lower strikes, but the increase in open interest was relatively modest.
Implied dealer gamma remains largely unchanged at -437MM compared to yesterday.
The main supporting strikes remain at 4000 with a huge short gamma position of -67MM and at 4050 (-35MM). In addition the strike at 4100 is gaining prominence and has now -19MM net gamma attached to it.
To the upside 4200 is the sole marker of significance, while gamma "flips" at 4205.
Looking Ahead
Investors have to digest a 30-year and two bill auctions today, which could inject some volatility into the fixed income market.
Later today japanese and chinese inflation data will get released.
Tomorrow is the big day, when the CPI numbers in the US will be presented.
Yields for German Bunds are exploding higher and are currently up over eight basis points at 1.445 percent. The equivalent Italian yield is up almost 15 basis points at 3.619 percent. The yield for 10-year Treasury Notes is up three basis points at 3.058 percent.
A UBS upgrade of Tesla is a supporting factor this morning in the US, also some better-than-expected May trade data out of China has been comforting.
However, there are reports that a southwest neighborhood in Shanghai has been locked down for COVID testing, and that entertainment venues in a Beijing district have been closed.
Over in Europe the ECB just announced that it has decided to leave its key interest rates unchanged, but the accompanying statement said the Governing Council intends to raise interest rates by 25 basis points at the July meeting and to end the net asset purchase program as well at that date.
Economic data
- China's May trade surplus 78.76 bln Dollar (58.00 bln expected, 51.12 bln previously). May Imports 4.1 percent year-over-year (2.0% expected, 0.0% previously) and Exports 16.9 percent (8.0% expected, 3.9% previously)
- Japan's May Machine Tool Orders 23.7% year-over-year (27.0% expected, 25.0% previously)
- Initial US Claims 229K (210K expected, 202K previously)
Gamma Discussion
As we have speculated yesterday, investors bought puts on Wednesday at lower strikes, but the increase in open interest was relatively modest.
Implied dealer gamma remains largely unchanged at -437MM compared to yesterday.
The main supporting strikes remain at 4000 with a huge short gamma position of -67MM and at 4050 (-35MM). In addition the strike at 4100 is gaining prominence and has now -19MM net gamma attached to it.
To the upside 4200 is the sole marker of significance, while gamma "flips" at 4205.
Looking Ahead
Investors have to digest a 30-year and two bill auctions today, which could inject some volatility into the fixed income market.
Later today japanese and chinese inflation data will get released.
Tomorrow is the big day, when the CPI numbers in the US will be presented.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.