Factory orders exceeded expectations and UST inverted yields, sending Wall Street closed mixed. May US Factory Orders grew +1.6% (Vs. Surv. +0.5%), following May Personal Spending which grew moderately +0.2% (Vs. Surv. +0.4%). Meanwhile, the inverted yield of UST2Y was 2.82% Vs. UST10T 2.80%, and tends to form a negative spread yield, but a downward trend in yields indicates a rotation from risk assets stocks towards safe haven, long tenor bonds. Currently, investors are anticipating a high US June YoY CPI (Surv. 8.8%; May 8.6%) next week, earnings season results, and a low Change in NonFarm Payrolls June (Surv. 265k; May 390k). However, the June Unemployment Rate is projected to remain at its lowest level of 3.6%.
Scarcity of gas supply and Newcastle ICE Coal being close to USD400/ton, pushed energy to lead sectoral gains or up more than 4%. Shares of export-based coal issuers with USD-denominated income rose, as Coal ICE Newcastle jumped more than 3% this July. The increase in global coal prices occurred amid rising natural gas prices and accelerated coal imports by Europe, prior to the protectionism policies of a number of countries. Indonesia, one of the largest coal producers, has the opportunity to take advantage of the European market demand. NHKSI Research projects that the JCI will move upward, in the range of 6,650-6,900.
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