Nasdaq 100 Drifts Higher in Low Volume; Oil Hits Two-Month High

Also, 30-year T-bond, gold, crude oil, and British pound futures

1. Nasdaq 100 E-mini futures (/NQ): +0.24% 
2. 30-year T-bond futures (/ZB): +0.19% 
3. Gold futures (/GC): +0.19% 
4. Crude oil futures (/CL): +1.15% 
5. British pound futures (/6B): -0.15% 

Yesterday’s listless, low-volume market environment has bled into today. Stocks are drifting higher amid a lack of news on the US-China trade talks front. B ut the negotiations have gone on a long time, which portends to a positive outcome. Treasury auctions come into focus the next several sessions, with 3s today, 10s tomorrow, and 30s on Thursday. Elsewhere, metals are taking a bit of a breather following a torrid run by silver to multi-decade highs, while crude oil is up for the sixth time in seven sessions, trading to its highest level since April 4. 

Stocks were slightly higher in early trading today as traders waited for more information on talks in London between Washington and Beijing. Nasdaq 100 futures were up 0.24% in the first hour of New York trading. Commerce Secretary Howard Lutnick said talks are ongoing, and he expects them to continue all day.

Taiwan Semiconductor Manufacturing (TSM) rose 2.5% this morning after the chipmaker reported a year-over-year increase for revenue in May. Vaccine makers were mixed this morning after Health and Human Services Secretary Robert F. Kennedy Jr. removed all members from a Centers for Disease Control and Prevention (CDC) advisory panel. GameStop (GME) is scheduled to report Q1 earnings after the bell today. 

Bonds continued to reverse some of Friday’s sell-off ahead of tomorrow’s consumer inflation data. Traders are also anticipating Thursday’s 30-year bond auction, which should offer clues on bond demand amid a volatile market backdrop. 30-year T-bond futures (/ZBU5) were up 0.61% in early trading. Meanwhile, the tax and spending bill working its way through Congress remains a key factor for traders to gauge how federal spending could affect the bond market. The Treasury is also scheduled to deliver a three-year note auction today. 

Gold futures (/GCQ5) were slightly lower in early trading after giving up modest earlier gains. Traders have held prices above the 3,300 level but last week’s one-month high was conceded after US jobs data crossed the wires on Friday. China continued to buy gold in May, according to the People’s Bank of China (PBOC). The buying continued despite high prices, underscoring Beijing’s appetite to diversify its reserves. The outcome of trade talks between the US and China are in focus for precious metals.  

Crude oil futures (/CLN5) rose over 1% this morning to extend recent gains as optimism over trade talks underway in London between the US and China appeared to prevail. Reuters reported Saudi oil shipments to China will be about 1 million barrels lower in July than the previous month. A Reuters survey also found the May increase in oil output from OPEC was limited. Traders have their focus on the weekly inventory report from the American Petroleum Institute (API) due today.   

British pound futures (/6BM6) were slightly weaker as traders digested data from the United Kingdom that showed some signs of weakness in its labor market. The United Kingdom’s unemployment rate rose to 4.6%, a nearly three-year high. Wages also showed some signs of slowing, putting a question mark over the British economy. Meanwhile, currency traders are waiting for results from several Treasury auctions due this week, specifically the 30-year bond auction later this week.  

Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. #@fxwestwater
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