Risk-off pressure remains
US Personal Spending on tap
Nikkei 1.13% Dax 0.41%
UST 10Y 0.67
Oil $37/bbl
Gold $1764/oz
BTCUSD $9144

Asia and the EU
No Data

North America Open
USD PI/PS 8;30
USD PCE 8:30

Its been a choppy night of listless trade in capital markets today with equities falling by more than 50 basis points at the start of European trade only to recover most of the losses by mid-morning dealing.

FX was also quiet with most pairs steady but USDJPY dipped below 107.00 once again trading 25 pips lower.

There was very little fresh news overnight and although COVID infections continued to rise to record highs markets continued to ignore the growing pandemic risk and were content to buy every dip.

On the eco calendar today the market will get a look at US Personal Income and spending as well as PCE data with forecasts expecting a sharp rebound in May after the lockdown in April. The market anticipates a 9% increase against a -13.6% contraction and if the data meets the projections it could offer yet another point of support for the bulls who have been relentless in driving risk assets higher.

A sharp jump in spending would confirm the upside thesis that the US consumer remains resilient and that the contraction in demand in April was simply an idiosyncratic event caused by the virus and the lockdown. However, if the May data proves disappointing it would suggest that consumer behavior is altering more permanently and could have much deeper implications on growth going forward.

For now, the markets remain bid but the pace and velocity of the upside move have slowed markedly hinting that rally may be starting to exhaust itself and will need only a modicum of disappointing news to turn into a selloff.