8/9/2019 Jul-19-Dj Capital Markets Report

1/3

DJ CAPITAL MARKETS REPORTMon Jul 19 06:36:00 EDT 2010

US MORNING BRIEFINGSNAPSHOT:

-Stocks seen higher; Treasurys lower; dollar mixed; Nymex crudelower at $75.96; gold lower at$1192.57.

-Watch for: Fed Governor Duke speaks at 0900 ET; NAHB Housing Market Index at 1300 ET

-Moody's Downgrades Ireland To AA2 As Debt Level Rises; IMF Breakdown WhacksHungarian Forint, Debt Markets; BOJ May Consider Easing If Dollar Stays Around Y85.

MARKETS OUTLOOK:

BONDS: Treasurys were slightly down in London as the market consolidated after sharp gainsmade last week that pushed the two-year yield to a record low. The euro was also resilientdespite Moody's downgrading Ireland and talks between Hungary and the IMF/EU over afunding deal being suspended over the weekend. Still the economic outlook remained cloudy asFed Chairman Ben Bernanke is also expected to give a cautious assessment at his testimony laterthis week, underpinning demand for safe havens. The two-year note was a tad down at 100-02/32to yield 0.593%; the 10-year note was down at 104-26/32 to yield 2.932%; and the 30-year bondwas lower at 107-15+/32, yielding 3.945%.

Corporate bonds: European corporate credit markets made a weaker start to the week, with theindexes widening after losses on Wall Street on Friday and Monday's downgrade of Ireland's

credit rating.FOREX: Currency markets maintained a quiet but buoyant tone in European trading hoursMonday, with the euro and sterling holding onto gains while the dollar weakened slightly.

By 0510 ET, the dollar was up in Europe at Y87.14, while the euro was up at $1.2927 and thepound was flat at $1.5277.

EQUITIES: Stocks are called to open higher Monday, as traders take advantage of last week'ssteep falls to look for a bounce, said David Morrison of GFT in London. On the corporate front,Delta, IBM and Texas Instruments are due to report second-quarter earnings Monday.

At 0544 ET, Dow Jones Industrial Average futures were trading up 0.5% at 10082.0, whileNasdaq 100 futures were up 0.3% at 1807.13 and S&P 500 futures were up 0.3% at 1065.95.

European shares declined for the fourth straight session, as Philips and Electrolux lost groundafter disappointing some investors on revenue and banks also came under some selling pressure.

COMMODITIES: Oil futures were a tad lower in European trade, recovering from intra-daylows as stocks pushed into positive territory and the euro rose against the dollar. Prices havetraded within a narrow range since the markets opened Sunday, although they have stayed belowFriday's settlement price.

8/9/2019 Jul-19-Dj Capital Markets Report

2/3

Analysts noted an oil spill in China and slim chances of a tropical storm developing in the Gulfof Mexico could provide support for prices. Money managers, including hedge funds, alsoincreased net long positions in crude futures, according to CFTC data Friday, which usuallysignals improving sentiment.

Spot gold was trading in a narrow $4 range Monday, holding around $1,190 a troy ounce as wary

investors awaited fresh economic news to give the market some direction.Analysts said market participants are cautious, uncertain about the yellow metal's next move.They said gold will likely take its cues from new economic figures and the European bank stresstests results, out Friday.

=======TODAY'S CALENDAR=======

ET PERIOD

0900 Fed Govenor Duke speaks in Arlington

1300 Jul NAHB Housing Market Index

==============================

TOP STORIES OF THE DAY:

FORMER PBOC ADVISER: CHINA SHOULD REDUCE DOLLAR ASSETS IN FX RESERVES

China should reduce the amount of U.S. dollar-denominated assets in its foreign exchangereserves in favor of those denominated in other currencies or other types of assets, formerPeople's Bank of China adviser Yu Yongding wrote in an article published in the state-run ChinaSecurities Journal on Monday.

HUNGARY REFUSES MORE AUSTERITY IN IMF, EU TALKS-MATOLCSY

Hungary's talks with the International Monetary Fund and the European Union broke over theweekend broke down over several issues, including the country's refusal to swiftly implement

strict austerity measures, Hungarian Economy Minister said Monday.

SPANISH BAD BANK DEBT TOPS EUR100B IN MAY FOR FIRST TIME

Bad debt held by Spanish banks topped EUR100 billion for the first time in May, as morecompanies filed for bankruptcy and unemployment continued to rise in the economic downturn.

INVESTOR RISK IN HUNGARY UP AFTER TALKS WITH IMF BREAK DOWN

Investors' reaction will be negative to Hungary's failure over the weekend to reach a deal withthe International Monetary Fund and the European Union that would allow it to draw on theremainder of its existing EUR20 billion IMF/EU standby credit line.

IMF BREAKDOWN WHACKS HUNGARIAN FORINT, DEBT MARKETS

The Hungarian currency and debt markets have slipped sharply after the country failed over theweekend to reach a funding deal with the International Monetary Fund and the European Union.

GERMAN ECONOMIC RECOVERY TO CONTINUE IN 2H - FINANCE MINISTRY

The German economy will continue to grow in the second half of the year, Finance Ministryofficials said in their monthly report for July published Monday.

8/9/2019 Jul-19-Dj Capital Markets Report

3/3

PBOC VICE GOVERNOR: INFLATIONARY PRESSURES HAVE EASED

Inflationary pressures have eased since the beginning of the year, but uncertainties remain,People's Bank of China Vice Gov. Du Jinfu said Monday

PBOC OFFICIAL: NEW YUAN LENDING TO SMES DECLINES IN SOME REGIONS

New yuan lending to China's small and medium-sized enterprises declined in some provinces lastyear as banks focused more on bigger clients amid the country's economic stimulus efforts,Zhang Jianhua, head of the People's Bank of China's research bureau, said Monday.

-By Iman Dawoud; Dow Jones Newswires

Disclaimer

(This article is general financial information, not personalized investment advice, as it does notconsider the unique circumstances affecting an individual reader's decision to buy or sell a

specific security. Dow Jones does not warrant the accuracy, completeness or timeliness of the

information in this article, and any errors will not be made the basis for any claim against Dow

Jones. The author does not invest in the instruments or markets cited in this article.)