Why Record High Diesel Prices Matter to Markets

What’s in Today’s Report:

• Why Record High Diesel Prices Matter to Markets

Futures are little changed following a generally quiet night of news as markets await actual confirmation of diplomatic progress between the U.S. and Iran.

Economically, the flash PMIs were mixed as the EU flash composite PMI was strong (53.1 vs. (E) 51.6) while the UK reading missed estimates (51.7 vs. (E) 52.2).

Today focus will remain first on geopolitics and to spur a further rally, we will need to see actual confirmation of diplomatic progress between the U.S. and Iran (likely a temporary reopening of Hormuz or ceasefire including the Houthis).

Outside of geopolitics, we get our first big economic reports of the month via the Flash Manufacturing PMI (E: 53.8) and Flash Services PMI (E: 56.0).  The key here is “Goldilocks” data that meets expectations but isn’t so strong that it argues for more rate hikes.  Speaking of rate hikes, we also have two Fed speakers today, Barr (10:05 a.m. ET) and Goolsbee (12:00 p.m. ET) and if they’re hawkish it should support yields.