PMI data showed that EU trade activity grew much faster
Notes / Observations
– Mixed preliminary European PMI data for May (Beats: France, Eurozone, United Kingdom; Misses: Germany.
– UK retail sales data is beating.
– Preliminary retail sales in April Australia M / M: 1.1% vs. 0.5% e.
– Australia’s May preliminary manufacturing PMI posted its 12th month of expansion and a record high (59.9 vs. 59.7 previously).
– Japan’s preliminary manufacturing PMI in May recorded its fourth consecutive month of expansion (52.5 vs. 53.6 previously).
– National CPI April Japan Y / Y: -0.4% v -0.5% e; CPI Excluding fresh products (core) Y / Y: -0.1% v -0.2% e.
– Japan Fin Min Aso noted that the US proposal for a 15% global minimum tax was a step forward; Need more discussion on the topic.
– British Chancellor of the Exchequer Sunak (Fin Min) said he was ready to secure public finances in the fall due to the coming windfall from an economic rebound and rising tax revenues.
– The Israeli cabinet approved the ceasefire in the conflict in Gaza.
– Fed’s Kaplan (non-voting; hawkish) reiterated his position that he would like to start discussing reducing QE as soon as possible.
– Fed Chairman Powell: The Fed will publish a report on the US digital currency this summer; The Fed has not decided whether to go ahead with a central bank digital currency (CBDC).
– BOC Governor Macklem noted that inflation data is currently broadly in line with MPR projections, with expectations remaining very well anchored at this stage. BOC stood ready to respond if higher inflation became persistent.
SPEAKERS / FIXED INCOME / FX / GOODS / ERRATUM
The clues [Stoxx600 +0.24% at 442.98, FTSE -0.41% at 6,991.01 , DAX +0.15% at 15,393.20, CAC-40 +0.37% at 6,367.28 , IBEX-35 +0.34% at 9,155.00 , FTSE MIB +0.51% at 24,827.50 , SMI +0.04% at 11,156.54, S&P 500 Futures +0.20%].
Market focal points / key themes: European indices open modestly higher and continually strong gains from the previous session and moved in the green as the session progressed after better-than-expected PMI releases from the EU and UK ; Richemont, Based in Switzerland, Rises to 4% After Release of Final Results; Fsttned trade in Amsterdan has increased sharply following the partnership with Tesla while Lufthansa is negotiating down 6% on the news that the shareholder is selling his stake; expected profits for the next US session include Deere, Buckle and Foot Locker.
– Consumer discretionary: Richemont [CFR.CH] + 4% (income), Travis Perkins [TPK.UK] + 3% (divestment), Lufthansa [LHA.DE] -6% (the shareholder sells his stake).
– Technology: Card Factory [CARD.UK] -10% (commercial update).
– BOE Hauser said that could adjust the composition of corporate bond purchases to a net zero. Greening corporate bond holdings to begin with the next reinvestment scheduled for this fall.
– France End Min The Mayor noted that he was looking to make the first disbursement of the EU Stimulus Fund by the end of July at the latest. The US proposal for a 15% global tax at the OECD was a good compromise and added that an agreement on digital taxation was also essential.
– Germany Fin Min Scholz (Chancellor candidate): believes that the EU recovery fund will be ready by the summer. The global minimum tax was crucial; The US proposal of 15% to the OECD was a big step forward and very realistic. Should have a minimum worldwide tax rate in the summer.
– EU decision to add UK to travel whitelist should have faced a two week delay due to concerns over the Indian variant of the virus.
– Central Bank of Sweden (Riksbank) Jansson said the inflation picture looks solid; The April staff projections appeared to be intact. Some way to go before would be concerned about inflation. Could see inflation at 3% for a year before policy action is needed. The underlying inflationary pressure is not that strong.
– Central Bank of Norway (Norges) Q2 Expectation Survey raised 12-month inflation expectations from 1.8% to 2.2% while reducing 2-3-year inflation expectations from 3.8% to 3.7%.
– Hungary PM Orban said second-quarter GDP growth is expected to be “phenomenal” and further ease viral brakes.
– Tokyo, Japan Gov Koike a reiterated position to continue preparations for the Olympic Games; seeks to host a safe and secure game. Talked to PM Suga about vaccinations and ways to speed up the process.
– Japan’s chief cabinet Sec Kato said the IOC will make the decision regarding the Olympics. The government’s decision on the state of emergency was unrelated to the games.
Currency / Fixed Income
– The US dollar was softer as concerns about typing talk in the Federal Reserve’s minutes eased. The dealers concluded that the Fed will keep its flexible policy.
– Eurozone PMI data was closely watched for further signs of economic recovery, but price action appeared to ignore better-than-expected PMI readings for the region. The failure of the German manufacturing PMI put some pressure on the euro and helped drive down bond yields in the region.
– EUR / USD stable at 1.2225 during question session despite PMI data.
– GBP / USD managed to climb back above the 1.42 level after better retail sales and PMI readings.
– (NL) House price index in April in the Netherlands M / M: 0.9% against 1.6% before; Y / Y: 11.5% against 11.3% before.
– (NL) Netherlands consumer confidence index in May: -9 versus -14 before.
– (United Kingdom) Retail sales in April (excluding auto / fuel) M / M: 9.0% vs. 4.4% e; A / A: 37.7% against 31.7% e.
– (United Kingdom) Retail sales in April (including automotive / fuel) M / M: 9.2% v 4.5% e; Y / Y: 42.4% against 36.8% e.
– (DK) Denmark Consumer confidence indicator for May: +2.8 vs. -1.1 before
– (CH) Swiss industrial production Q1 Y / Y: + 4.8% v -1.9% before; Industry and construction Y / Y production: + 4.5% v -2.0% before.
– (CH) Money supply Apr M3 Switzerland Y / Y: 4.7% against 5.7% before.
– (MY) Malaysia in mid-May Foreign reserves: $ 110.6B against $ 110.8B previously.
– (TR) Turkey May Consumer confidence: 77.3 against 80.2 before.
– (FR) France May preliminary manufacturing PMI: 59.2 vs. 58.5th (5th month of expansion); PMI services: 56.6v 53.0e; Composite PMI: 57.0v 53.7e.
– (DE) Germany May preliminary manufacturing PMI: 64.0 vs. 65.9th (11th month of expansion); PMI services: 52.8v 52.0e; Composite PMI: 56.2 vs. 57.1e.
– (SE) Industry capacity in the first quarter of Sweden: 89.4% against 88.0% previously.
– (CN) Shanghai weekly copper inventories (SHFE): 221.1 K against 229.2 K tonnes previously.
– (EU) May euro zone preliminary manufacturing PMI: 62.8 vs. 62.5e (11th month of expansion); PMI services: 55.1 v 52.5e; Composite PMI: 56.9 against 55.1e.
– (IT) Italy Mar Industrial Sales M / M: 1.6% vs. 0.2% before; Y / Y: 38.1% against 0.8% before.
– (UK) Russia Narrow Money Supply w / e May 14 (RUB): 14.08T vs. 14.06T before.
– (PL) Poland Apr PPI M / M: 0.5% v 0.4% e; Y / Y: 5.3% v 4.9% e.
– (PL) Poland Apr Construction Production Y / Y: -4.2% v -7.7% e.
– (UK) May preliminary manufacturing PMI: 66.1 vs. 60.8th (12th consecutive expansion and record); PMI services: 61.8v 62.2e; Composite PMI: 62.0 v 61.9e.
– (HK) Hong Kong Apr CPI Composite Y / Y: 0.7% vs. 0.6% e.
– (IS) Iceland Wage index April M / M: 0.3% against 0.4% before; Y / Y: 7.4% against 10.6% before.
– (BE) Belgium Consumer confidence index for May: +4 vs. -6 before.
Issue of fixed income securities
– None seen
– Informal EcoFin meeting of the EU.
– Daily liquidity statistics from the ECB (EU).
– 5:30 a.m. (IN) India will sell combined bonds of 320 G INR in 2026, 2033, 2035 and 2050.
– 5:30 a.m. (ZA) South Africa will sell a combined ZAR 1.2 billion in I / L 2029, 2038 and 2050 bonds.
– 06h00 (IE) Ireland April PPI M / M: none is v 1.0% before; Y / Y: none is v -10.1% before.
– 6 a.m. (UK) DMO will sell £ 3.5bn of 1-month, 3-month and 6-month invoices (£ 0.5bn, £ 1.0bn and £ 2.0bn respectively ).
– 06:00 (PL) Poland sells 2023, 2026, 2030 and 2031 bonds (5 tranches).
– 6:45 am (United States) Daily setting of the Libor.
– 07:00 (MX) Retail sales in Mexico in March M / M: 1.6% ev 1.6% before; Y / Y: -0.1% ev -6.3% before.
– 07:30 (IN) Weekly Forex Reserve in India with May 14: not estimated against 589.5 billion dollars before.
– 07:30 am (IS) Iceland will sell the RIKB 2024 and 2026 bonds.
– 08:00 (IN) India announces next ticket issue (held on Wednesday).
– 08:00 (UK) Daily Baltic Dry Bulk Index.
– 8:30 am (CA) Retail sales in March Canada M / M: 2.3% ev 4.8% before; Retail sales (ex-auto) M / M: 2.3% ev 4.8% before.
– 9:45 am (US) May Markit Manufacturing preliminary PMI: 60.1ev 60.5 forward; PMI services: 64.4ev 64.7 before; Composite PMI: No is v 63.5 before.
– 10:00 am (United States) April Sales of existing homes: 6.08Me vs. 6.01M before.
– 10:00 (EU) The euro zone could increase the consumer confidence index: -6.5ev -8.1 before.
– 11:00 a.m. (EU) Potential sovereign ratings after European close ((Moody’s on Greece’s sovereign rating; S&P on Slovakia’s sovereign rating).
– 1:00 p.m. (United States) Weekly number of Baker Hughes rigs.