Concerns arise over next phase of UK easing restrictions
Remarks / Observations
- Germany April factory orders drop unexpectedly in April.
- UK housing data in Halifax continues to benefit from the extended stamp duty exemption.
- British Prime Minister Johnson said he was under pressure to leave certain Covid measures in place amid further evidence that the Delta variant originally detected in India was rapidly increasing the rate of infection.
- G7 ministers reached agreement to commit to an overall minimum tax of at least 15%; the proposal is only in its early stages with several unknowns yet to be clarified.
- China’s trade balance in May 45.5 billion dollars against 50.8 million dollars; Year-on-year exports: 27.9% vs. 32.1% e; Year-on-year imports: 51.1% vs. 53.5% e (the highest since March 2010).
- S&P confirmed Australia’s sovereign rating at AAA while raising the outlook from negative to stable.
- UK Health Sec Hancock noted that the June 21 reopening was balanced. He added that the Covid Delta variant ‘approximately 40% more transmissible (Note: comment perhaps hinting at a delay in planning the June 21 reopening if needed).
- France Fin Min Le Maire reiterated the view that GDP growth in 2021 would be 5.0%. The national economy would be back to pre-Covid levels by the first quarter of 2022.
- Germany The exit polls in Saxony-Anhalt have the CDU with 36% and the AfD with 22.5% (Note that the results are considered positive for Laschet’s candidacy for the post of chancellor (head of the CDU) .
- Italian public administrator Min Brunetta noted that he could receive 25 billion euros during the July-August period from the EU pandemic stimulus fund.
- G7 finance ministers have reached an agreement to commit to a global minimum tax of at least 15% country-by-country and the elimination of all taxes on digital services.
- Treasury Secretary Yellen tweeted that President Biden’s $ 4.0 billion spending plan would be good for the United States, even if it contributed to rising inflation and rising rates. interest.
- President Biden rejected the GOP’s new infrastructure offer but still planned to meet with Sen Capito (R-WV) again on Monday, June 7. (Note: Capito came up with a proposal that would increase infrastructure spending by $ 50 billion, but Biden said that fell short of his goals).
Speakers / Fixed income / FX / Commodities / Erratum
- Indices [Stoxx600 0% at 452.5, FTSE +0.2% at 7081, DAX -0.1% at 15680, CAC-40 -0.1% at 6512, IBEX-35 +0.2% at 9109, FTSE MIB +0.4% at 25675, SMI -0.1% at 11563, S&P 500. Futures -0.2%]
Market focal points / Key themes:
- European indices are trading mixed after a mixed Asian trading session, US futures slightly down on a light morning on the corporate front.
- Reckitt’s shares changed little after the divestiture of their infant formula business in China in a $ 2.2 billion deal, Clipper Logistics, CNOVA and S4 Capital advanced on business upgrades, while Argenx is trading at a very low level following the cessation of collaboration with trastuzumab with Cilag.
- Going forward, flagship products include GIII clothing and Jiayin group.
- Consumer discretionary: CNOVA [CNV.FR] + 3.4% (provides indications in the short and medium term).
- Health: Reckitt [RKT.UK] -0.2% (to sell the infant formula business in China to Primavera Capital for approximately $ 2.2 billion), Addex Therapeutics [ADXN.CH] + 3.3% (Starts the Phase 2 clinical study of ADX71149 for epilepsy), Argenx [ARGX.BE] -6.4% (To recover the worldwide rights to Cusatuzumab).
- Industrial Products: Taylor Wimpey [TW.UK] + 2.5% (analyst upgrade).
- Technology: Atari [ATA.FR] + 13% (New step in the strategic development of Atari’s blockchain division).
- The BOE’s discussion paper on digital currency noted that the issue could be government or private. Stable coins presented a multitude of problems for banks.
- The Russian Ministry of Economy announced GDP growth in April YTD of 1.8%.
Currency / Fixed Income
- USD found some relief following drop in payroll after U.S. Treasury Secretary Yellen tweeted President Biden’s $ 4.0 billion spending plan would be good for the United States even though it contributed to higher inflation and higher interest rates.
- EUR / USD at 1.2160 with focus on the next policy meeting on Thursday. The ECB will decide the pace of emergency bond purchases over the next quarter at that time.
- GBP / USD was weaker as UK healthcare sector Hancock noted that the June 21 reopening was in balance. He added that the Covid Delta variant ‘approximately 40% more transmissible (** Note: comment possibly hinting at a delay in planning the June 21 reopening if needed).
- (SE) Sweden June SEB Housing price indicator: 65 v 66 before.
- (CH) Swiss unemployment rate in May: 3.1% vs. 3.1% e; Unemployment rate (seasonal adjustment: 3.0% vs. 3.1% e.
- (DE) Germany Apr. Factory orders H / M: -0.2% v + 0.5% e; Y / Y: 78.9% vs. 77.8% e.
- (FI) Finland’s preliminary trade balance in April: – € 0.3bn versus – € 0.3bn previously.
- (NO) Norway Apr. Industrial production M / M: -0.1% against + 0.9% previously; Y / Y: 0.9% against 0.6% previously.
- (NO) Norway Manufacturing production Apr. H / M: -1.9% against + 0.7% previously; Y / Y: 4.7% against 4.7% previously.
- (ZA) South Africa May gross reserves: $ 54.1 billion versus $ 53.7 billion previously; Net reserves: $ 52.2 billion versus $ 51.9 billion.
- (CH) Swiss May IPC M / M: 0.3% vs. 0.3% e; Y / Y: 0.6% against 0.5% e; CPI Core Y / Y: 0.2% vs. 0.0% previously.
- (CH) Swiss May CPI EU Harmonized M / M: 0.2% vs. 0.3% previously; Y / Y: 0.3% against 0.1% previously.
- (ES) Spain Apr. Industrial production M / M: 1.2% vs. 0.5% e; Y / Y: 48.2% vs. 44.4% e; Industrial production NSA (unadjusted) Y / Y: 50.3% against 15.4% previously.
- (CH) Swiss May foreign currency reserves (CHF): 902.5B against 914.4B before.
- (AT) Austria May Wholesale price index M / M: 1.7% vs. 0.6% previously; Y / Y: 10.9% against 8.7% previously.
- (CZ) Czech industrial production in April Y / Y: 55.1% vs. 54.0% e; Y / Y construction production: -3.9% against -3.3% previously.
- (CZ) Czech April national trade balance (CZK): 19.3 B vs. 14.8 Be.
- (United Kingdom) May Halifax House Price Index H / M: 1.3% vs. 1.4% previously; Y / Y: 9.5% against 8.2% previously.
- (SE) Sweden’s May budget balance (SEK): +36.9 billion against -16.9 billion previously.
- (CH) Total Swiss weekly sight deposits (CHF): 710.8B against 710.5B previously; National sight deposits: 632.2 billion against 634.6 billion previously.
- (CZ) Czech unemployment rate in May: 3.9% against 4.2% previously.
- (CN) China’s May Foreign Reserves: $ 3.222 vs. $ 3.215 (2nd consecutive monthly increase).
- (EU) Eurozone June Sentix Investor confidence: 28.1 vs. 25.4e.
- (IS) Iceland’s preliminary trade balance in May (ISK): -15.5 billion against -11.2 billion previously.
Issue of fixed income securities
- (EU) The EFSF opened its portfolio to sell EUR 0% April 2024 bonds through a syndicate; forecasts saw -4bps at mid-swaps.
- (IL) Israel’s foreign exchange balance in May: No vs. $ 194.0 billion previously.
- (UR) Ukraine May Official reserve assets: none compared to $ 28.0 billion previously.
- (MX) Citibanamex survey of economists.
- 05:20 (EU) Daily liquidity statistics from the ECB.
- 05:30 (DE) Germany will sell a total of 6.0 billion euros in bulls at 3 and 9 months.
- 5:30 a.m. (NL) The Dutch Debt Agency (DSTA) will sell EUR 2.0 to 4.0 billion in 3- and 6-month bills.
- 05:30 (ZA) South Africa announces details of upcoming I / L bond sale (held on Friday).
- 6:00 AM (IL) Israel will sell ILS 1.3 billion combined bonds in 2024, 2026, 2031 and 2037.
- 6:45 am (US) Daily Libor correction.
- 07h00 (TR) Turkey will sell bonds.
- 07h00 (MX) Mexico March Gross fixed investment: + 2.3% ev -4.5% before.
- 07:25 (BR) Weekly survey of economists at the Central Bank of Brazil.
- 08h00 (PL) Poland May Official reserves: no estimate against 155.7 billion dollars previously.
- 08:00 (UK) Daily Baltic Dry Bulk Index.
- 08:00 (ES) The Spanish Debt Agency (Tesoro) announces details of the upcoming issue.
- 08:00 (IN) India announces details of upcoming bond sale (held on Friday).
- 8:30 am (CL) Chile’s trade balance in May: 0.7 Be vs. $ 2.0 billion previously; Total exports: Not estimated vs. $ 8.1 billion previously. Total imports: Not estimated compared to $ 6.1 billion previously; Copper exports: no estimate against 4.5 billion dollars previously.
- 08:30 (CL) Chile May Reserves: No is v $ 42.6 billion before.
- 09h00 (FR) The French Debt Agency (AFT) will sell 5.3 to 6.5 billion euros in 3-month, 6-month and 12-month bonds.
- 9:00 am (UK) Russia May Official reserve assets: $ 602.0 billion compared to $ 590.5 billion previously.
- 09h00 (CL) Chile Apr Nominal salary H / H: No est v 1.3% before; Y / Y: No is v 4.3% before.
- 9.45am (EU) Weekly update of the ECB’s QE bond purchases.
- 10:30 (TR) Turkey May Cash Budget Balance (TRY): No is v -13.3B before.
- 11:30 a.m. (US) The Treasury will sell 13 and 26 week bills.
- 12:00 (UK) Russia May CPI H / M: 0.6% ev 0.6% before; Y / Y: 5.8% ev 5.5% before.
- 12:00 (UK) Russia May CPI Core M / M: 0.5% ev 0.6% before; Y / Y: 5.7% ev 5.5% before.
- 3:00 p.m. (United States) April consumer credit: $ 20.5 vs. $ 25.8 billion before.
- 4:00 p.m. (US) Weekly crop progress report.
- 7:00 pm (KR) South Korea Apr Current account balance: none is against $ 7.8 billion before; Balance of Goods (BOP): no estimate against $ 7.9 billion previously.
- 7:01 p.m. (United Kingdom) May BRC like-for-like Y / Y sales: not estimated vs. 39.6% previously.
- 19:30 (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: is not v 111.4 before.
- 19:30 (JP) Japan Apr Labor Cash Earnings Y / Y: 0.8% ev 0.6% forward (revised from 0.2%); Y / Y Actual Cash Profits: 1.4% ev 0.8% previously (revised 0.5%).
- 19:50 (JP) Japan Q1 Final GDP SA Q / Q: -1.2% ev -1.3% prelim; Q / Q annualized GDP: -4.9% ev -5.1% preliminary; Nominal GDP Q / Q: -1.6% ev -1.6% prelim.
- 19:50 (JP) Japan Apr Current account balance: ¥ 1,490Te vs. ¥ 2,650T before; Adjusted current account: 1.567Te vs. ¥ 1.696T previously; Trade balance (BoP basis): 295.8 Be against 983.1 B previously.
- 7.50 p.m. (JP) Bank loans in Japan: no vs. 4.8% previously; Bank loans (ex-trust): No against 4.3% previously.
- 9:00 p.m. (PH) in the Philippines Unemployment rate in April: No vs. 7.1% previously.
- 21:30 (AU) Australia May Business Confidence: No est v 26 prior; Trade conditions: No is v 32 before.
- 23:00 (ID) Indonesia May Foreign reserves: No estimate compared to $ 138.8 billion previously.
- 11:30 p.m. (HK) Hong Kong to sell 3-month, 6-month and 12-month coupons.
- 11:35 p.m. (JP) Japan will sell 30-year JGB bonds.