Stocks and commodities drifted higher on a day with no major economic news.
Quite possibly the bulls were stoked by new global banking regulations that were far less stringent than many feared. Capital requirements are not very high and banks will have 8 years to comply.
The news that Microsoft will issue debt to pay out dividends helped Nasdaq soar.
Otherwise, China released an assuring news that its august Industrial production rebounded from July, handily beating estimates. This helped industrial metals and copper gain in particular. China also reported better than expected retail sales number for August as well. Seems to me like China has succeeded in managing a soft landing.
On the bonds side, much better than expected budget deficit in US in August helped fuel a huge rally in US treasuries. I reckon even at this rock bottom yield there are people who are scared of default. Thankfully bunds are not moving much.
Basically, the news of the past couple weeks paint the picture that while things are bad, it is not dismal. It has been a very nice run with SP500 up nearly 7% MTD. Could this be one of those months where cutting exposure in second half would pay off?
Tomorrow is shaping up to be more interesting with UK CPI (should affect gilts and GBP) and US retail sales reported.
China majors' fuel stocks down sixth month in row
• Combined inventories of gasoline, diesel and kerosene held by China's top two oil firms were down 6.4 percent in August versus July, the sixth monthly decline, due to robust domestic sales and exports, an industry official said on Monday.
• Diesel stocks held by Sinopec Corp and PetroChina were down a sharp 8.2 percent last month from July, while that of gasoline dropped 2.8 percent, said the official who has knowledge of the data but is not authorised to release them.
India oil product exports may double in 3 yrs
• India's petroleum products exports could reach 80-90 million tonnes per year in 2-3 years, from nearly 40 million tonnes currently, Oil Secretary S. Sundareshan told reporters on Saturday.
• India's product exports were 4.79 million tonnes in July, up from 4.09 million tonnes in June, latest government data show.
U.S. Midwest weather outlook unfavorable for crops
• Corn and soybean crops in the U.S. Midwest face a week of mixed weather with scattered showers forecast from Tuesday through to Friday, a forecaster said on Monday.
• "Wet weather in the western Midwest during the next seven days is unfavourable for maturing corn and soybeans and the early harvest," said Mike Palmerino, agricultural meteorologist with Telvent-DTN Weather.
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