4 Jun 2020


As of New York Close 3 Jun 2020,

started the day with , led by a strong AUD rally in the Asia session which reached a high of 0.6983. With stops triggered, it then fell aggressively during London hours to hit a low of 0.6856. After sucking in the stubborn bears, it promptly rebounded to close the day above 0.6900. No clear reason could be found for the moves.

U.S. The ISM Non-Manufacturing Index rebounded to 45.4% in May (consensus 44.0%) from 41.8% in April. The key takeaway from the report is that the pace of contraction in the non-manufacturing sector decelerated in May. Things still aren’t good in terms of business activity, but they were evidently considered by respondents to be less bad than what was seen in April. The ADP Employment Change Report estimated 2.76 million private-sector jobs were lost in May versus consensus estimates that were closer to 9.0 million. New orders for manufactured goods declined 13.0% m/m in April, as expected, following a downwardly revised 11.0% decline (from -10.3%) in March.but they corroborated the This outlook continued tosome of which have also been Euro held near multi-month highs on expectations the European Central Bank will expand its bond buying programme later in the day to shore up the virus stricken economy. The European Central Bank is widely expected to increase the size of its 750 billion euro ($669 billion) Pandemic Emergency Purchase Programme (PEPP) as early as Thursday.

on Wednesday and while the seems to have The Bank said that given improved market functioning, it would .

S&P 500 extended its recovery rally by 1.4% on Wednesday, as the latest data continued to depict signs of a turnaround in the economy. The Dow Jones Industrial Average (+2.1%) and Russell 2000 (+2.4%) rose more than 2.0%, while the Nasdaq Composite (+0.8%) struggled to keep pace.

In corporate news, Lyft (LYFT 34.44, +2.76, +8.7%) said rides were up 20% in May versus April (but down 70% yr/yr), while Zoom Video (ZM 223.87, +15.79, +7.6%) provided impressive quarterly results and guidance.

Separately, an interesting report from The Wall Street Journal indicated that several executives from the poultry industry were indicted on allegations of price fixing. Shares of Tyson Foods (TSN 60.10, -2.40, -3.8%) fell into negative territory following the report.

After long refusing to explicitly criticize a sitting president, former Defense Secretary Jim Mattis accused Trump on Wednesday of trying to divide America and roundly denounced a militarization of the U.S. response to civil unrest. “Donald Trump is the first president in my lifetime who does not try to unite the American people — does not even pretend to try,” Mattis, who resigned as Trump’s defense secretary in 2018, wrote in a statement published by The Atlantic.

He drew a comparison to the U.S. war against Nazi Germany, saying U.S. troops were reminded before the Normandy invasion: ‘The Nazi slogan for destroying us … was ‘Divide and Conquer.’

He also criticized the use of the word “battlespace” by Defense Secretary Mark Esper and Army General Mark Milley, chairman of the Joint Chiefs of Staff, to describe protest sites in the United States. “We must reject any thinking of our cities as a ‘battlespace,’” Mattis wrote.

Alluding to our comments yesterday on the importance of the “narrative” surrounding the U.S. Armed Forces: ”The reverence allies have for it and the enemy’s fear is a powerful political yardstick that helps the U.S. conduct diplomacy and solves geopolitical issues. Trump could tear the most powerful geopolitical tool by tainting the image of the U.S. Army. This will embolden China’s push within the Pacific and help advance their One-Belt-One-Road initiative.”, it seems that this view concurs with that of key military officials in DC. The impact of this hubris is not going to be immediate, butinevitably weakening the empire. As America is stuck in a Thucydides Trap (with China), Trump is

Snap Inc said it would no longer promote Trump’s account in Snapchat’s Discover section, saying his incendiary comments last week made the account ineligible for the curated section where users explore new content.

Trump’s Snapchat account, which consists mostly of campaign content and does not contain the informal rhetoric he regularly uses on his favored platform Twitter, will remain public and accessible to people who follow it or search for it, Snap said.

Democratic rival Joe Biden, who is seeking to oust Trump in the November presidential election, quickly capitalized on the move. In a video posted to Snapchat, he said, grinning, that he was proud to run for president “and still be on Snapchat.”

Twitter ignited a furor last week by placing labels on several of Trump’s tweets that it said violated its rules on misleading information and glorifying violence, including one which used the racially charged phrase “when the looting starts, the shooting starts.” Facebook declined to take any action on the same posts, prompting an employee protest on Monday.

Shares fell 2.4% after the announcement. Snap did not specify which of Trump’s comments it considered inciteful, but Chief Executive Evan Spiegel told staffers in a memo on Sunday he would “walk the talk” on divisive content and the “legacy of racial violence and injustice in America.”

Drawing from our comments yesterday: “In today’s world, Politically Correct, Morally Responsible, and Environmental Friendliness are key attributes Millennials and Generation Zs hold onto, turning activists if these are violated. Coupled with the network effect of social media, ideas and causes can spread like wildfire. This rift of leadership may be a crack that can cascade into something big, do keep an eye on the development as tech stocks seem to be walking on thinning ice as the days go by.” This narrative is taking shape as the days go by, with

Australia will give eligible residents A$25,000 ($17,323) to build or significantly renovate their homes, Prime Minister Scott Morrison said on Thursday, as Canberra moves to revive a construction sector badly affected by the virus pandemic. Dubbed HomeBuilder, the package worth A$680 million (US$471 million) is Australia’s fourth economic stimulus package as it seeks to repair an economy that is now in its first recession in 29 years.

Morrison said the package would support jobs and allow people to build a family home, a long-held dream for many Australians.

Although the size of the stimulus seems small relative to the incessant monetary bazookas being launched by global central banks over the course of the virus crisis, tsparks off a broader trend we believe will play out in time to come,The effectiveness of monetary policy is waning and countries are aggressively pursuing the fiscal side of things, hence the introduction of Modern Monetary Theory (largely fiscal in nature). be the name of the game as it fulfills several key roles,

These arein nature and


The European Central Bank is widely expected to announce a ramping up of its pandemic emergency purchase program (PEPP) later today as the Eurozone economy slowly emerges from weeks of lockdown. But as the Euro rallies on the prospect of a double dose of fiscal and monetary stimulus, a smaller-than-anticipated increase in the PEPP and signs of opposition to further policy easing may spoil the party.

So the question being asked now is by The is somethingAnything is sure toand may pose a, which has been bolstered by economic recovery hopes. Although there is a real risk that countries such as Austria and the Netherlands may try to scale down the package, that’s not the only problem facing the Euro. A court in Germany recently ruled that the ECB’s debt-crisis era asset purchase program (APP) is in violation of the German constitution, threatening to cut off the Bundesbank’s participation in that program.

The for the markets would be for the Bank to not onlyto its emergency program but to also which requires government bond purchases to be made in proportion to the size of member states’ economies.This has meant German bunds have made up a larger portion of the ECB’s purchases even though countries like Italy would benefit more from having a greater share.


Another day, but the same two words — relentless rally. With no significant news to drive the price action, the market did what it has been doing of late i.e. go up. It’s pretty clear that the sentiment is resilient and strong although most market commentators are hating the rally. Be on the right side or be on the side lines.


Stock Indices


There will be times when the market just keeps going regardless of what the world throws at it. Bad news is not news, no news is good news, and good news is great news! This pretty much sums up the market sentiment of late.

For now, the bulls are strongly in charge. It trades like a bubble, and no one seems to be able to pinpoint the reasons why it trades so strongly. Almost every reason for the stock market to fall is there — US-China tensions, US protests, slowing economies globally, record unemployment everywhere, but the bull rages on.

Faced with markets like this, you either get involved or get out of the way. Standing in the way will only be asking for trouble.



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