July 6 (Reuters) – A look at the day ahead in European and global markets from Wayne Cole.
It’s been one of the quietest starts to a week in ages, with no new wars, or tariffs and much of the world watching the football.
There has been no reported progress in U.S.-Iran peace talks, but at least the Strait of Hormuz is partly open. The UKMTO counted 160 vessels transiting from Monday to Saturday last week, with 98 of those tankers. It’s still far short of the 138 daily average transits before the war, but every barrel helps.
And OPEC+ over the weekend agreed to lift output quotas by 188,000 barrels per day from August, taking the total increase since April to almost 800,000 bpd.
Oil eased in response, though Brent futures are priced around $72.50 right out to December, suggesting the market thinks prices have found a floor for the time being.
Asian share markets are modestly in the red, likely profit-taking ahead of the earnings blitz. A pullback is no surprise given South Korea’s main index has gained almost 90% this year, Taiwan 62% and Japan 37%.
Samsung Electronics is set to make a splash on Tuesday, as analysts expect an 18-fold increase in profits. The world’s largest memory chipmaker by sales is likely to flag an operating profit of 86 trillion won ($56.35 billion) for the April to June quarter, according to an LSEG SmartEstimate.
For Wall Street, Delta Air Lines and PepsiCo are tasters before the main course begins with the major banks next week. Consensus is for EPS growth of 25% year-on-year, with semiconductors and energy accounting for half of that.
S&P 500 and Nasdaq futures returned from the break slightly firmer, while European futures are little changed after making solid gains last week.
Treasury yields are a shade lower as investors grow more confident of a Federal Reserve hold later this month following the payrolls miss.
Minutes of the last Fed meeting on Wednesday will no doubt sound hawkish given that nine members plotted at least one hike for this year, though that was before the latest tumble in oil prices. Futures imply a 22% chance of steady rates at the July 29 meeting, but 60% for a hike on September 16.
Fed Governor Christopher Waller is speaking in Rome later in the session, and the influential New York Fed Governor John Williams appears on Thursday, ahead of next week’s testimony by Fed Chair Kevin Warsh to the House Financial Services Committee.
The ISM Services survey is also due later and forecasts favour only a slight easing to a still-healthy 54.0.
Key developments that could influence markets on Monday:
– Appearances by Federal Reserve Board Governor Christopher Waller, ECB Board member Isabel Schnabel, ECB President Christine Lagarde, ECB Board member Philip Lane and Riksbank Deputy Governor Anna Seim
– EU retail sales and producer prices for May. German industrial output for May. U.S. ISM services survey for June
(Editing by Jacqueline Wong)
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