Want to receive this post in your inbox every morning? Sign up here
ECB starts buying corporate bonds, some good news for the U.K., and Clinton turns attention to Trump. Here are some of the things people in markets are talking about today.
ECB buys corporate debt
The European Central Bank's corporate-bond buying program kicked off this morning with the bank buying debt issued by companies including Anheuser-Busch InBev NV, Telefonica SA, Siemens AG, and Renault SA, according to people familiar with the matter. Borrowing costs in Europe had already fallen to unprecedented levels with the average yield on investment-grade company notes in euros dropping to 1 percent this week. In the sovereign debt space, where the ECB also continues to be a buyer, the yield on Germany's 10-year bund is within a hair of turning negative, falling to (yet another) record low of 0.033 percent this morning.
Some good news for the U.K. economy
Concerns over the Brexit vote have dominated every discussion on the U.K. economy lately, so today's industrial output data must come as a welcome relief. According to the Office for National Statistics output rose 2 percent in April, far ahead of economist expectations for no change. The pound, which rallied following the data, was back to unchanged at $1.4550 at 6:00 a.m. ET, as the currency's volatile week continues.
Clinton v. Trump
Hillary Clinton has won the California primary, cementing her position as the Democratic nominee for president. In her victory speech last night, given before the results of the California vote were known, she celebrated that she is the first woman to achieve a major-party nomination. Meanwhile, her campaign made it clear she is prepared to win ugly against Donald Trump. The Republican nominee has not had a good week following his comments about a judge's Mexican ancestry. Yesterday, GOP Senator Mark Kirk said he could no longer support Trump following the remarks.
The MSCI Asia Pacific Index rose 0.5 percent overnight, with Japan's Topix Index rising 0.8 percent following a revision higher of GDP. In Europe, the Stoxx 600 index dropped 0.5 percent by 6:10 a.m. ET, with banks leading the losses. European stocks continue to trail their U.S. peers, with outflows of $36 billion so far this year thanks to elevated risk perception from the looming Brexit referendum. Futures for the S&P 500, which reached a level 0.5 percent below an all-time high in yesterday's session, were flat.
Oil recovery continues
Crude is trading near 10-month highs, with a barrel of West Texas Intermediate for July delivery at $50.80 at 6:18 a.m. ET. Expected record-high summer gasoline demand and continuing supply problems due to the security situation in Nigeria means the glut in global production is likely to ease further.
What we've been reading
This is what's caught our eye over the last 24 hours.
- We've hit peak human and an algorithm wants your job. Now what?
- Brexit contagion is spreading across the EU, Pew study finds.
- A lone wolf saved by Soros is trouncing his peers with $1 billion fund.
- Dark days at the Folly as Nomura traders join Europe's jobless.
- U.S. 10-year Treasury demand highest in 50 years before auction.
- Zimbabwe's black market, where the dollar trades against itself.
- Chinese investors flood into Hollywood.