Sentiment is mostly higher this morning amid a European equity market rally and before U.S. markets close early for the July 4th holiday to reopen on Thursday, when investors anticipate the ECB will cut its benchmark rate by -25bps. Sovereign spreads to German Bunds are tighter this morning, the FX markets are mixed with modest changes overnight, and Asian stocks are closing higher. S&P 500 futures are little changed before data is released on U.S. factory orders, indicating that equities may halt their two-day rally that brought the S&P 500 to nearly a two-month high.
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Sentiment is mixed this morning somewhere between consolidation and improvement after Friday’s extreme bounce higher, with EU stocks gaining on the day, lower commodities with Brent Crude down -1.6%, and currencies in Europe are underperforming. Bund and Treasury yields are mixed in modest ranges, and EU sovereign spreads to bunds are moderately wider. The holiday-shorted week will nonetheless prove an important one, with highlights including Friday’s Nonfarm Payrolls report (est is 90K), and a rate decision by the BOE on Thursday in which economists are predicting a cut of -25bps. S&P 500 futures are pointing to a higher open, despite euro-area unemployment reaching the highest level on record.
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