That sums it up brilliantly

In an FT article, the ex PIMCO CEO Mohamed El Erian calls the US economy range bound with little prospect of a collapse or a lift off. He goes on to say the Fed is keeping things on an even keel. This has seen investors take these factors as a signal of a predictable and extended period of economic, financial and policy calm. If this changes investors expect a Yellen put from the Fed. While this has squeezed risk premiums, bond yields and the VIX index lower, corporates are less eager to take risks in expansion or investment because unlike their financial counter parties, they cannot unwind their risk exposure as easily as traders. You cannot sum up the present better than that. This week we see the Fed FOMC meet Tues / Wed, and while another claw back in the monthly QE level of US$ 45 billion is expected, interest rates will remain on hold. China is reported to have cut the reserve requirements of several of the large public banks which is seem as an economic stimulant.

The commodity market has tracked higher, including the base metals, on the back of the situation in the ME. Is the uprising by the Sunni ISIS, the start of a long protracted confrontation between the Sunni / Shia sects of Islam going to turn northern Iraq into a Somalia or Syria or even worse set off a new conflict like the Iraq / Iran war of 1980 - 88, or will the uprising be turned back like the Mali uprising of 2012. The timeline of this situation will dictate the price of oil and other commodities. This has pushed Ukraine to the side but it likewise has a major impact on energy prices especially in struggling Europe. The Iraq situation seems to be unsettling markets in US trading.

The government of Indonesia has clarified its stance over some mineral export duties but this was related to sn not cu. Looking at LME stock moves it is interesting that the two metals most effected by that country’s mineral export duties, ni and sn have seen price outperform, they are the only metals that have seen stocks rise so far in 2014. While on rises, the trading houses continue to acquire mining assets with the news, Alcoa is to sell its 55% stake in the Jamaican bauxite and al refinery operation the Noble Group within two years. The other 45% is owned by the Jamaican government. The iron ore 62% CIF Tianjin price has slipped to US$ 89 / tonnes.

Perhaps the most watched global economic indicator is Euroland CPI that came in at 0.1% for May (Apr 0.2%), leaving yoy at 0.5%. In the US, the Jne NY Empire manufacturing index unexpectedly rose 19.2 (May 19.01) and NAHB housing market index a strong 49 (45). In May industrial production up 0.6% (Apr revised to -0.3% from -0.6%); manufacturing output rose 0.6% (revised to -0.1% from -0.4%) and capacity utilisation a good 79.1% (78.6%). Amongst this good data the IMF lowered its US growth forecast this year to 2% from 2.8% in April.