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Commercial Banking: June 22nd Edition

Global stocks rise amid mixed trade signals, stimulus expectations

After threatening retaliation, China calls on US to meet halfway on trade.

➤ ECB official calls for significant stimulus package; euro dips

GE accused of accounting fraud.

➤ US disappointed by Gibraltar's decision to release Iran oil tanker.

U.S. stock futures followed global stocks higher amid mixed trade signals and stronger expectations of additional central bank stimulus.

After threatening retaliation, China urged the U.S. to meet halfway on trade and find "mutually acceptable solutions" ahead of scheduled talks in September. President Donald Trump said he and Chinese President Xi Jinping have a scheduled call "very soon" and that any trade agreement must be on "our terms."

Separately, China said it will unveil a plan to shore up consumption in a bid to boost economic growth.

Following a shaky session yesterday, Wall Street looked set to open higher this morning as stock futures for the S&P 500 and Nasdaq 100 rose 0.9% and 1.3%, respectively.

General Electric Co. plummeted 11.3% yesterday after a report surfaced alleging that the industrial conglomerate was running a decadeslong accounting fraud to conceal the extent of its financial woes. It was 2% higher in premarket trading.

In Asia, Japan's Nikkei 225 was little changed, as the Shanghai SE Composite edged 0.3% higher and Hong Kong's Hang Seng rose 0.9%. Hong Kong's real GDP declined 0.4% in the second quarter, after an expansion of 1.3% in the preceding quarter.

European shares tracked gains in Asia around 6:30 a.m. ET, with Germany's DAX and France's CAC 40 up around 1% each. The FTSE 100 was trading 0.6% higher after suffering from a delayed open due to a "services issue" at the London Stock Exchange.

In currencies, the euro lost 0.3% versus the dollar as European Central Bank Governing Council member Olli Rehn called on the ECB to roll out a "significant and impactful" package of stimulus measures that surpasses market expectations to combat a slowdown in economic growth.

The comments helped fuel hopes for a "more dovish move" from the central bank, with markets now pricing in a more than 70% chance of a 20-basis-point deposit rate cut in September, compared to about 40% earlier this week, said Fritz Louw, currency analyst at MUFG Bank.

"If markets continue to price in an increasingly strong stimulus package in September, this could weigh further on the euro."

Sterling advanced 0.6% versus the U.S. currency, while the Japanese yen lost 0.2%.

Elsewhere, the Mexican peso gained 0.2% against the dollar after Banco de México joined other central banks' easing spree with its first rate cut in more than five years.

In the debt market, yields on 10-year Treasurys added 3 basis points to 1.561%. Yields on German Bunds due in a decade rose 1 basis point to negative 0.699%.

Brent crude oil jumped 1.7% to $59.22 per barrel on the ICE Futures Exchange. Gibraltar decided to release an Iranian oil tanker, despite disapproval by the U.S. Washington reportedly threatened sanctions against entities that do business with the ship.

Gold fell 0.5% to $1,523.60 per ounce.

More from S&P Global Market Intelligence:

Yield curve warns of greater recession risk, but bond market signal not perfect

Chinese M&A investment in Europe, US hits 5-year low on slow economy, trade

Soaring S&P 500 earnings obscure waning profitability in corporate America

At Camp Kotok, fears over China and 'magic money tree' overshadow Fed policy

Major pipeline firms overcame weakened commodity prices in Q2

The day ahead:

8:30 a.m. — U.S. housing starts

10 a.m. ET — U.S. advance quarterly services report

10 a.m. ET — University of Michigan's U.S. consumer sentiment survey (Econoday consensus: 97.5)

1 p.m. ET — U.S. Baker-Hughes rig count