The second trading day of June finds a significant shift in sentiment underway. Although US markets managed to finish Monday mixed with some help from a few large cap names, the underlying selloff continued overnight and into this morning. US index futures are down 0.3%, while in Europe, all of the major indices, including the Dax, FTSE, CAC and MIB are down 0.4%-0.9%.
Commodities are in retreat for a second day in a row. US Crude Oil is down another 1.7% and trading below $73.00/bbl following the OPEC+ decision to phase out voluntary production cuts over time. Natural Gas is up 2.0% as its rebound continues. Metals are getting hammered with copper falling 2.2% and Silver sliding nearly 3.0%, while Gold is down 0.9%. This action suggests that investors may be getting concerned about the health of the global economy and the outlook for resource demand, particularly after US Manufacturing PMI disappointed yesterday. US factory orders are due at 10:00 am EDT.
Treasury yields are falling broadly, with the US 10-year treasury note yield slipping back under 4.40%, which has ignited a rally in bonds. This action coming just ahead of the Bank of Canada and European Central Bank meetings tomorrow and Thursday suggests that investors may be expecting to hear some dovish news or hints on interest rates.