Markets Extend Month-End Rally Ahead of a Busy Data Stretch

Morning Minutes will not be issued on Canada Day and will return on Thursday, July 2nd.

Building on Monday’s rally, which saw the NASDAQ gain more than 2.0%, equities have continued to climb overnight, with particular strength in Europe. Today marks the final trading day of both the month and the quarter, while the next few sessions bring a flurry of economic announcements ahead of Friday’s US holiday.

Oil prices have stabilized near $70.00/bbl, while gasoline remains above $3.00/gallon despite pleas from President Trump for lower prices at the pump. Metals are also rebounding this morning, particularly copper, which is benefitting from positive economic news out of China.

Canada’s monthly GDP for April grew faster than expected at 0.5% compared with the Street’s 0.4% estimate and a previous decline of 0.1%. China’s Manufacturing PMI came in at 50.3 versus the Street’s 50.1 estimate, while China Non-Manufacturing PMI reached 50.2 versus expectations of 49.9, with both readings back above the 50-expansion threshold. Germany also posted a drop in unemployment of 1K versus expectations for a 10K increase, pointing to an improving job market.

NASDAQ futures are up 2.2%, while Dow futures are steady. In Asia, the Nikkei rose 0.9%, while the Hang Seng slipped 0.6%. In Europe, the DAX is up 1.4%, benefitting from the positive German unemployment report, while the FTSE is up 1.1%.

Crude oil is up 0.4%, trading above $70.00/bbl. Gasoline is down 0.2% but remains above $3.00/gallon. Gold is steady, while Copper is up 1.6% and Silver is up 1.3%.

The US 10-year Treasury note yield is holding near 4.40%, while the US 30-year Treasury note yield is holding near 4.85%. The US Dollar is rallying against other currencies, with the Euro down 0.3% and the Loonie down 0.2%.

Nike reports earnings after the close today, while US Chicago PMI is due at 9:45 am EDT. The third quarter kicks off tomorrow with several central bank speakers, including Fed Chair Warsh, Bank of Canada Governor Macklem, and Bank of England Governor Bailey. Wednesday also brings Manufacturing PMI reports from around the world and US ADP payrolls, followed by US Nonfarm Payrolls on Thursday and Service PMI reports on Friday.

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