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15Jun2016 Pre-Market Commentary: Global Markets Up, USA Markets Look To Open Slightly Down

Written by Gary

Not sure why, but Brexit seems to be on trader's minds. Asian and European markets are up after yesterdays red. Oil prices are still on a downward path.

Here is the current market situation from CNN Money

European markets are broadly higher today with shares in France leading the region. The CAC 40 is up 1.20% while Germany's DAX is up 0.94% and London's FTSE 100 is up 0.93%.

What Is Moving the Markets

Here are the headlines moving the markets.

Futures higher as near-term rate hike chances dim

(Reuters) - U.S. stock index futures were higher on Wednesday, snapping a four-day losing streak, as investors see little room for the Federal Reserve to be able to raise interest rates in the near term.

Fed expected to hold rates steady as Brexit vote clouds outlook

WASHINGTON (Reuters) - The Federal Reserve is expected to keep interest rates unchanged on Wednesday and signal if it still plans to raise rates twice in 2016 amid concerns about a U.S. hiring slowdown and Britain's possible exit from the European Union.

London traders brace for biggest night since 'Black Wednesday'

LONDON (Reuters) - The world's biggest banks including Citi and Goldman Sachs will draft in senior traders to work through the night following Britain's referendum on EU membership, set to be among the most volatile 24 hours for markets in a quarter of a century.

Fed faces battle to escape world's low interest rate grip

WASHINGTON (Reuters) - Evidence that the U.S. neutral rate of interest remains stalled near zero may slow Federal Reserve rate hikes even more than expected, tying the hands of policymakers until a rebound in global demand or other forces raise that key measure of the economy's underlying strength.

As gates open in Shanghai, Disney already adding to $5.5 billion park

SHANGHAI (Reuters) - Boasting the Magic Kingdom's tallest fairytale castle and longest musical parade, Walt Disney Co's Shanghai park is already its biggest overseas outpost. But even as gates open to the public this week, it's still building to keep customers keen.

Exclusive: M&M maker may shake up McFlurry, Blizzard, Snickers Pie

NEW YORK/LOS ANGELES - Mars Inc, the one-time maker of king-sized chocolate bars, is considering taking its M&Ms out of sugary dessert treats, including McDonald's McFlurry.

Subjective U.S. bank forecasts to figure in loan loss reserves

NEW YORK (Reuters) - A U.S. accounting regulator plans to release new rules on Thursday that will change how banks set aside money for bad loans, raising fresh questions about the role of forecasts in their financial reports.

MSCI says domestic China shares still not ready for its global benchmark

HONG KONG (Reuters) - China has failed again to convince U.S. index provider MSCI Inc to add local Chinese shares to its key emerging market index, and the company could not say when it was likely to give the green light, as global investors raised fresh objections.

Oil slides for fifth day as Brexit and inventory builds bite

LONDON (Reuters) - Oil prices fell for a fifth day on Wednesday, their longest losing streak since February, knocked by mounting concerns about Britain's possible exit from the European Union and a surprise build in U.S. inventories.

Frontrunning: June 15

Osborne Warns of Brexit Tax Toll as 'Leave' Gains in Polls (BBG)

Clinton wins D.C. primary, has 'positive' meeting with Sanders (Reuters)

Federal grand jury could charge wife of Orlando shooter (Reuters)

Brexiteers swiftly closing in on Remain as poll reveals there's just one point between the two sides (Sun)

Trump gains slightly on Clinton after Florida attack: Reuters/Ipsos poll (Reuters)

Hill Republicans despondent over Trump (Politico)

London traders brace for biggest night since 'Black Wednesday' (Reuters)

Venezuela in talks with China for grace period in oil-for-loans deal (Reuters)

Why Billions in Proven Shale Oil Reserves Suddenly Became Unproven (BBG)

Bank of America axe hovers over thousand of retail jobs (FT)

About 16 pct of Europe's top-rated corporate bonds yield below zero (

Deutsche Bank: "If One Wanted A Simple Indicator Of A Broken Financial System, Then This Is It"

If there is one bank that is more concerned than any other about global central bank unorthodoxy, it is Deutsche Bank which as we reported yesterday, saw its stock price drop to a record low yesterday. As such it is not surprising that in his overnight note, DB's Jim Reid focuses on the "broken financial system" and highlights the one indicator that confirms just how broken the system is: the Bund Yield.

This is what he said:

The Moon landing, JFK's assassination, John Lennon's shooting, maybe even the Red Wedding episode from Game of Thrones. In years to come will they also be asking you where you were at the time you heard the news that 10 year Bund yields turned negative for the first time? For me it was in an airport in Vienna! Although there has been a creeping inevitability on this for several days now this landmark remains a truly remarkable event. If one wanted a simple indicator to reflect a broken financial system then this would be a strong candidate. In today's PDF we show 10 year Bund yields back to the early 1800s to put this move in some perspective. It's incredible when you think that the central bank responsible for the inflation rate in Germany has a target of (just below) 2% per year. Let us stress that until Governments/central banks change policy, yields are likely stay at ultra low levels due to secular stagnation type themes and the overwhelming amount of QE hoovering up bonds. However it still reflects a broken financial system.

Which is not to say that DB wants a return to normalcy. As we repo ...

All Eyes On Yellen As Global Stocks Rebound Despite Brexit Fears, Record Low Yields

Following MSCI's second Chinese snub in as many years, when yesterday the indexer again decided not to include China in its EM index due to concerns over Chinese "market integrity", there was some concern that Chinese stocks would tumble now that China's market manipulation is the primary topic preventing the country from being integrated into the financial community. That was ironic because after Chinese equities opened down around a percent they promptly spiked with Shanghai closing 1.6% higher, despite the global risk off yesterday, on - you guessed it - more manipulation and government intervention, which pushed not only Chinese equities higher but the USDCNY which after rising to the highest in 5 years, dipped just fractionally below the key resistance level of 6.60.

œIt's a sharp [equities] reversal so there has to be some government intervention, said Francis Lun, CEO at Geo Securities in Hong Kong. œThe Chinese government never wants to see the market falling too much. Dear Francis, no government ever wants to see that.

Aside from China, the story has been more of the same: Brexit and today's Fed meeting (to be followed by tomorrow's BOJ decision), and after several days of muted of concentrated selling, European stocks rallied, helping end the steepest selloff in global equities since January, as the British pound rebounded ahead of the Federal Reserve's policy review on stronger than expected UK employment data (Feb-April Unemployment 5.0%, Exp. 5.1%).

The Stoxx Europe 600 Index climbed for the first time in six days and most shares rose on the MSCI Asia Pacific Index. As noted above, Shanghai equities reversed initial losses,

Global Financial Stress Soars Most Since 2011 European Crisis

After a relatively calm and stable three months, the last three days have seen Bank of America Merrill Lynch's Global Financial Stress Index soar by the most since the middle of the European crisis in August 2011.

The index, that tracks cross-market risk, hedging demand and investor flows has surged more than 90 percent in just three days...

The last time the GFSI was rising at such a pace was August 2011, when this happened...

In August, European Commission President Jose Manuel Barroso warns that the sovereign debt crisis is spreading beyond the periphery of the eurozone.

The yields on government bonds from Spain and Italy rise sharply - and Germany's falls to record lows - as investors demand huge returns to borrow.

This level of stress is higher than the Aug 2015 China crisis. It sems for now that more than a few are banking on 'protection' saving them...

We just gently remind them what happened in August when ETF liquidity ...

Brexit: Which Banks Will Be Hit Hardest

The odds are increasing that Britain may quit Europe; that would cost banks dearly in the U.K. and beyond.

Zero Yields, the Fed and 'Brexit,' Oh My!

The Federal Reserve watches Brexit and negative German yields, not just the U.S. economy, as it weighs its own interest-rate policy.

MSCI and China: Why There's No Fear of Missing Out

MSCI made the right call in keeping mainland Chinese shares out of its influential indexes. There is plenty of China to go around already.

Infographic Of The Day: Healthy Dinner Ideas For Weight Loss

One of the great struggles when it comes to eating healthy and trying to lose weight with exercise is the continual battle of meal preparation.

Early Headlines: Asia Stocks Mixed, House Incumbents Losing Primaries, Is Job Market Stronger?, Brexit End Of EU?, Calif GDP 6th In World, Cocoa Corruption, India To Be Nuke Leader, Japan Coal Use Surges And More

Written by Econintersect

Early Bird Headlines 15 June 2016

Econintersect: Here are some of the headlines we found to help you start your day. For more headlines see our afternoon feature for GEI members, What We Read Today, which has many more headlines and a number of article discussions to keep you abreast of what we have found interesting.


Strategists in Europe foresee dire consequences in Fed's reluctance to raise interest rates

The Federal Reserve is looking nowhere near raising interest rates this week, but by putting off another rate hike Fed chief Janet Yellen and company risk setting the U.S. and the world up for another economic crisis, strategists warn.

Need to Know: 'Brexit' panic may be your big chance to buy the S&P 500

Investors are picking up stocks this morning, as some say maybe the panic over Brexit is a little far gone. Ready to rush as other investors head for the exits? Our call of the day says get ready to profit off what could be an emotional few days.

London Markets: FTSE 100 on the rise as appetite for risk picks up

U.K. stocks are moving higher after a four-session string of losses as investors regain a œlittle more optimism.

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