• Inflation remains tame for Switzerland and Taiwan
  • UK Brexit Secretary Davis rejects UK PM May’s new Brexit plan


  • Asian equities decline as investors fear first round of tariffs
  • China reiterated they will not implement tariffs before the US on Friday


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  • European Automakers rise on German press reports the US ambassador to Germany has told Automaker Execs that it would suspend threats of tariffs on cars imported from EU if the EU lifted duties on US cars
  • IMF cuts 2018 German Growth forecasts, lifts 2019 outlook
  • Some ECB members are uneasy that investors are not pricing an interest rate hike until Dec 2019; a move in Sept or Oct is on the cards although any decision on rates will depend on economic outlook
  • Brexit Secretary David Davis rejects PM May’s new Brexit plan (had proposed customs compromise)

Economic Data:

  • (DE) Germany May Factory orders M/M: 2.6% V 1.1%E; Y/Y: 4.4% V 1.7%E (surging more than twice as forecast)
  • (ES) Spain Jun Industrial Output NSA Y/Y: 1.6% v 11.2% prior; Industrial Output SA Y/Y: 1.6% v 1.7%e
  • (DE) Germany Jun Construction PMI: 53.0 v 53.9 prior
  • (CH) Swiss Jun CPI M/M: 0.0% V 0.1%E; Y/Y: 1.1% V 1.1%E
  • (SE) Sweden May Private Sector Production M/M: 1.1% v 0.3%e; Y/Y: 4.0% v 2.7%e
  • (UK) Jun New Car Registrations Y/Y: -3.5% v +3.4% prior
  • (TW) Taiwan Jun CPI Y/Y: 1.3% v 1.5%e; CPI Core Y/Y: 1.30% v 1.0% prior
  • UN FAO World Food Price Index: 173.7 v 176.2 prior
  • (EU) Euro Zone Jun Retail PMI: 51.8 v 51.7 prior

Fixed Income Issuance:

  • (ES) Spain Debt Agency (TESORO) sells total €3.84B VS €3.5-4.5B indicated range in 2021, 2030 2041 SPGB bonds
  • (ES) Spain Debt Agency (Tesoro) sells €920M v €0.5-1.0B indicated range in 0.65% inflation-linked 2027 bond (SPGBei); Real Yield: -0.154% v -0.297%
  • (FR) France Debt Agency (AFT) sells total €8.0B VS €7.0-8.0B indicated ranged in 2028, 2031 AND 2034 Oats



  • Indices [Stoxx50 +0.7% at 3,436, FTSE +0.3% at 7,593, DAX +1.1% at 12,448, CAC-40 +0.7% at 5,357; IBEX-35 +0.9% at 9,847, FTSE MIB +1.1% at 21,928, SMI +0.3% at 8,692, S&P 500 Futures +0.4%]
  • Market Focal Points/Key Themes: European stocks open slightly higher and maintained the trend as the session progressed; consumer discretionary underperforming; risk sentiment supported over hopes of resolving trade issues; materials and financials better performers; Czechia and Slovakia closed for holiday; car makers supported after US reportedly offered to suspend tariffs; Venezuela closed for holiday; earnings expected in the upcoming US session include Xplore Technologies and International Speedway


  • Consumer discretionary: Associated British Foods ABF.UK -4.2% (results), Electrocomponents ECM.UK +3.1% (trading update), FNAC Darty FNAC.FR +5.1% (analyst action), Juventus JUVE.IT +7.6%(contracting Cristiano Ronaldo), Sodexo +5.8% SW.FR (results)
  • Energy: SBM Offshore SBMO.NL -6.5% (Brazil court orders Petrobras to withhold payments)
  • Financials: Generali G.IT +2.1% (asset sale)
  • Industrials: Linde LIN.DE +1.5% (Praxair transation)
  • Materials: Glencore GLEN.UK +3.9% (share buyback)
  • Technology: Roodmicrotec ROOD.NL +6.8% (results)


  • (EU) ECB’s Praet (Belgium, chief economist) Reiterates expectation is that policy rates will remain at their present levels at least through the summer of 2019 (in-line with July 3rd speech)


  • EUR/USD firmed up as market pricing for an October 2019 ECB rate hike and speculation about supportive M&A flows. The pair pushes towards 1.17 as momentum continues.

Fixed Income

  • Bund Futures trade 25 ticks lower at 162.19 on conviction that ECB may raise rates sooner. Upside targets 163.25 followed by 163.85, while a return lower targets the 159.75 level.
  • Gilt futures trade at 122.90 lower 13 ticks following the move in Treasuries. Support continues stands at 121.75 then 120.25, with upside resistance at 123.85 then 124.25.
  • Thursday’s liquidity report showed Wednesday’s excess liquidity rose from €1.847T to €1.852T. Use of the marginal lending facility climbed from €0M to €50M.
  • Corporate issuance saw no deals priced in the primary market

Looking Ahead

  • 07:30 (US) Jun Challenger Job Cuts Y/Y: No est v -4.8% prior
  • 08:05 (UK) Baltic Dry Bulk Index
  • 08:15 (US) Jun ADP Employment Change: No est v 178K prior
  • 08:30 (CL) Chile May Economic Activity (monthly GDP) M/M: No est v -0.4% prior; Y/Y: No est v 5.9% prior
  • 08:30 (US) Initial Jobless Claims: No est v 227K prior; Continuing Claims: No est v 1.705M prior
  • 09:00 (CL) Chile May Nominal Wage M/M: No est v 0.1% prior; Y/Y: No est v 3.0% prior
  • 09:00 (MX) Mexico Jun Consumer Confidence: No est v 88.3 prior
  • 09:00 (MX) Mexico Apr Gross Fixed Investment: No est v -4.1% prior
  • 09:00 (RU) Russia Gold and Forex Reserve w/e Jun 29th: No est v $456.3B prior
  • 09:45 (US) Jun Final Markit Services PMI: No est v 56.5 prelim, Composite PMI: No est v 56.0 prelim
  • 10:00 (MX) Mexico Central Bank (Banxico) Jun Minutes
  • 10:00 (US) Jun ISM Non-Manufacturing Composite: No est v 58.6prior
  • 11:00 (US) Weekly DOE Crude Oil Inventories
  • 14:00 (US) FOMC Minutes from Jun 13th Meeting
  • 15:00 (MX) Mexico Citibanamex Survey of Economists
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