• Chinese Foreign Min Spokesman Lu Kang: Trade deal Trump referring to was never in place, China never broke any deal A trade deal should be based on equality, mutual benefit
  • China said to have extended ban on imports of medium to heavy rare earths, including dysprosium oxide and terbium oxide, from Myanmar; raised rare earth import tariffs from the US to 25% from 10%
  • The RBA May minutes revealed a softening in language with outlook less favorable with an easing policy in the next 6 months (replacing prior wording of not a strong case for near term adjustment In monetary policy)
  • RBA Gov Lowe said the board will consider case for a rate cut in June


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  • OECD cuts 2019 Global GDP forecast, while maintaining the 2020 forecast. Raises 2019 and 2020 Eurozone GDP forecast; Global growth to remain subpar amid trade tensions
  • Cable drops to 5 month low as PM May faces Cabinet ministers today in a last ditch attempt to sway them to support her Brexit deal; MP Rees-Mogg says he will not be backing her Withdrawal agreement Bill, saying it is a very bad deal.
  • Commons leader Leadsom actively considering to be party leader when PM May steps down, continues to support PM May deal.



  • Indices [Stoxx600 +0.37% at 378.86, FTSE +0.47% at 7,345.56, DAX +0.63% at 12,117.25, CAC-40 +0.26% at 5,372.76, IBEX-35 +0.21% at 9,219.00, FTSE MIB +0.50% at 20,642.50, SMI +0.25% at 9,605.80, S&P 500 Futures +0.25%]
  • Market Focal Points/Key Themes: Equities European Indices trade slightly positive across the board after strong Asian session on news that Huawei said to be granted temporary 90-days license in U.S. and U.S. Commerce Department comments that it may soon scale back the trade restrictions placed on company. U.S. futures also trade in positive territory with NASDAQ futures contracts up half a percent. On the corporate front, Infineon trade about 1% higher after Huawei founder comments that Infineon has not stopped supplying chips to Huawei refuting earlier Nikkei press reports. Major British retailer Tesco trades lower after announcement that it is actively exploring options to sell its existing mortgage portfolio. On the earnings front, Ceconomy in Germany trades 3.5% higher after earnings and affirmed outlook. Telecom Italia also trades higher on earnings reported yesterday after the European close. Galliford Try, WH Smith, Homeserve among notable risers this morning on earnings releases and trading updates. In other news, Evotec trades 3% higher on acquisition. Looking ahead, notable earners include Home Depot, J.C. Penney, AutoZone, Kohl’s Corporation and many others.
  • Consumer discretionary: WH Smith [SMWH.UK] +1% (trading update; CEO steps down), Tesco [TSCO.UK] -1.5% (exploring options to sell its existing mortgage portfolio), Electrocomponents [ECM.UK] -2% (earnings), Galliford Try [GFRD.UK] +12% (trading update)
  • Industrials: Ceconomy [CEC.DE] +3.5% (earnings), Homeserve [HSV.UK] +2.5% (earnings), Scapa [SCPA.UK] -9% (earnings; CEO steps down)
  • Healthcare: Evotec [EVT.DE] +3% (acquisition)
  • Technology: Infineon [IFX.DE] +1% (Huawei founder comments)
  • Telecom: Telecom Italia [TLIT.IT] +3% (earnings)
  • Materials: Fresnillo [FRES.UK] +1% (trading update)


  • (CN) China Foreign Min Spokesman Lu Kang: Trade deal Trump referring to was never in place, China never broke any deal
  • (UK) Commons leader Leadsom: Actively considering to be party leader, will make an announcement when PM May stands down
  • (IT) Italy Fin Min Tria: expect higher economic growth in H2, next year, In next budget govt has to find alternative measures to avoid VAT hike
  • (US) Energy Sec Perry: U.S. going to impose sanctions on Nord Stream 2
  • (JP) Japan Automobile Association: ‘Profoundly’ disappointed by US President Trump’s announcement that imported vehicles and parts threaten national security
  • (EU) ECB’s de Guindos (Spain): Slower growth momentum we are seeing increases the risk of tail events

Currencies/Fixed Income

  • The USD is strengthening against most major pairs as Fed Chair Powell made comments overnight saying that he sees business risk lending as moderate and that job creation and wages are strong. We see the 10 Year treasury trading lower for the past 3 days increasing yields mildly. AUD/USD earlier we saw the minutes which sent the Aussie trading lower after the RBA lowered its growth forecast and saying that its outlook would be less than favorable without an easing policy. Prior levels around the 0.6830 a level set back in 2015 and the low over the past 10 years. EUR/USD The Euro continues to trade sideways as it remains below the 1.12 handle as it eyes decade long low of 1.1120. Yields for Bunds continue to remain negative as the Bund futures dip back below the 167 handle. GBP/USD The cable now trades below 1.27 handle as Brexit talks continue to go nowhere and we approach tomorrow’s CPI numbers and the hearings regarding inflation expectations

Economic Data

  • (DK) Denmark May Consumer Confidence Indicator: 5.9 v 3.7 prior
  • (NL) Netherlands Apr House Price Index M/M: 0.4% v 0.4% prior; Y/Y: 7.7% v 7.7% prior (CH) Swiss Apr M3 Money Supply Y/Y: 3.5% v 3.8%e
  • (ZA) South Africa Mar Leading Indicator 104.5 v 105e
  • (PL) Poland Apr Employment M/M: 0.0% v 0.1%e; Y/Y: 2.9% v 3.0%e
  • (GR) Greece Mar Current Account: -€1.5B v -€1.0B prior

Fixed Income Issuance

  • None seen

Looking Ahead

  • 05:30 (SL) Sri Lanka Apr National CPI (NCPI) Y/Y: No est v 2.9% prior
  • 05:30 (UK) Weekly John Lewis LFL Sales data
  • 07:45 (US) Weekly Chain Stores Sales data
  • 08:00 (UK) Daily Baltic Dry Bulk Index
  • 08:55 (US) Weekly Redbook LFL Sales data
  • 10:00 (US) Apr Existing Home Sales: No est v 5.21M prior
  • 10:00 (EU) Euro Zone May Advance Consumer Confidence: No est v # prior
  • 10:00 (MX) Mexico Weekly International Reserve data
  • 10:30 (NZ) Fonteraa Dairy Auction
  • 16:30 (US0 Weekly API Oil Inventories
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