Thomson Reuters
Good Morning, and Happy Summer Solstice! Global risk assets are on fire this AM, with the S&P up 1.3% as three of six opinion polls in the UK published over the weekend showed a shift towards "remain" - propelling the Pound for the biggest daily rise since 2008. Massive bids across the board in Europe, with the DAX up 3.5% as every sector surges north led by Europe's banking sector, up 4.5%. The FTSE is climbing 3% as Banking and homebuilder stocks are ripping higher in London. Volumes are strong, with most exchanges trading 30% above normal trends. In Asia, the Nikkei leaps 2.3% as the Yen gets hit, and Aussie climbs 1.8% as the big 4 banks rip higher. Shanghai climbs small as angst over large shareholder sales held back China, while India underperformed on the shock news the head of their central bank is stepping down.
Gold, the U.S. dollar, German bonds and the Swiss franc are under pressure as havens reverse ahead of Yellen on the Hill tomorrow - The German 10YY back to 5bp, helping the US 10YY climb 6bp. Despite the Yen reversing a 6session winning streak, the DXY is under sharp pressure as Pound and Euro rebound sharply. Despite this tailwind, Gold whacked as havens subside, losing 1% and dragging silver with it. Industrial commodities are in a great mood tho, led by a 1.6% pop in Oil as WTI has its best 2sessions in a month, and 1.8% in Natty. Even Copper is in rally mode, with the red metal adding 1%. Softs are all under pressure tho, led by a 2% drop in Corn and 1.5% in Soybeans.
Pretty quiet day of catalysts ahead of us, with ECB's Mersch speaking at a Conference in Brussels at 9, while Fed's Kashkari Gives Prepared Remarks at a "Too Big to Fail" conference at 12:15. At 1pm, the US Treasury auctions off $26B in 2Y notes. Down in Washington, FCC Chairman Tom Wheeler gives policy address at 12:30, while Congress makes its way back from Father's Day weekend. Ahead of us later this week, we get Janet at Congress Tuesday and Weds while Draghi speaks tomorrow - Builders will be watching New and Existing Home Sales for May - Fins will focus on Fed Stress Test results Thurs - while Friday will be explosive, with "Brexit" Referendum results due and the annual Russell reconstitution.