• Main focus remains on geopolitical risks
  • G20 leaders meeting in Osaka from June 28-29th (Friday-Saturday); Traders focused on expected meeting between Trump and Xi
  • Germany Jun IFO survey was mixed
  • EU Commission said to hold off on launching a disciplinary process against Italy’s rising debt levels this week


  • US and Chinese trade teams said to be discussing next steps after Presidents Trump and Xi agreed to meet on the sidelines of the upcoming Group of 20 summit in Japan
  • China Commerce Ministry (MOFCOM): China and US trade negotiating teams could meet as soon as Tues, Jun 25th
  • China PBoC Dep Gov Gousheng: Policy room for countries to deal with economic slowdown was limited
  • China Assistant Foreign Min: World economy faced rising risks; G20 to ensure unity and cooperation; would safeguard its fundamental interests
  • Reserve Bank of India (RBI) Deputy Gov Acharya said to resign 6 months before his term ends
  • RBA Gov Lowe reiterated that risks to global economy were tilted to the downside; legitimate to ask how effective monetary easing would be globally; if everyone was easing, the impact on exchange rates was offset


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  • EU Commission was expected to hold off on launching disciplinary process against Italy this week
  • Turkey opposition CHP party won the redo of the Istanbul mayoral election, CHP candidate Imamoglu was leading by a 54% to 45% margin over the ruling AKP (99% of the ballots counted)


  • President Trump: moving ahead with additional sanctions on Iran aimed at preventing it from getting a nuclear weapon; military action still on the table



  • Indices [Stoxx600 -0.1% at 384.3, FTSE +0.1% at 7412, DAX -0.5% at 12283, CAC-40 -0.2% at 5519, IBEX-35 -0.4% at 9191, FTSE MIB -0.4% at 21,301, SMI -0.1% at 9951, S&P 500 Futures +0.2%]
  • Market Focal Points/Key Themes: European Indices trade mixed this morning following a generally positive session in Asia and stronger US Index futures. On the corporate front shares of Metro in Germany trades higher after a takeover offer at €16/shr; Carrefour trade higher following a agreement to sell a stake in in Chinese activities to for €1.4B. After recent weakness Natixis shares rebound slightly as the board support H20 Management’s measures, while Morphosys gains on the presentation of analysis from L-Mind study. To the downside Eurofins declines following providing impact analysis of the cyber attack in early June, Daimler declines after cutting its full year outlook, while Voltalia falls following a capital increase. Looking ahead notable earners include Lennar Corp, Factset Research and Barnes and Noble Education.


  • Consumer discretionary: Carrefour [CA.FR] +2% (divestment), Metro [B4B.DE] +1.5% (analyst action), Voltavia [VLTSA.FR] -6.5% (capital raise), Lufthansa [LHA.DE] -1.5% (dividend policy change; capital markets day)
  • Consumer staples: Eurofins Scientific [ERF.FR] -4% (cyber attack impact)
  • Financials: Danske Bank [DANSKE.DK] -2% (Head of Banking resigns)
  • Healthcare: Morphosys [MOR.DE] +6% (study results)
  • Industrials: Daimler [DAI.DE] -4.5%, BMW [BMW.DE] -1.5%, Volkswagen [VOW3.DE] -1.5% (Daimler’s profit warning), Leonardo [LDO.IT] +2.5% (acquisition speculation)


  • German IFO economists noted that the domestic economy was heading for the doldrums but its maintained its current GDP growth forecast and did not see any recession forthcoming. US-China trade despite was the main cause of uncertainty while Brexit and Iran conflict did not have any dominant role at this time
  • Ukraine Fin Min Markarova: In active talks for longer IMF loan
  • India Central Bank (RBI) statement confirms Deputy Gov Acharya to resign citing personal reasons
  • China Foreign Ministry spokesperson Lu Kang: Fedex should offer a proper explanation on Huawei matter
  • China Vice Fin Min Zou Jiayi said to be appointed to PBoC monetary policy committee
  • Iran Presidential advisor Ashena: US offer for talks with no preconditions is not acceptable while sanctions remain in place
  • Iran Naval chief Khanzadi: Country is capable of shooting down additional US spy drones
  • Russia Energy Min Novak: we see rivalry heating up on global energy markets

Currencies/Fixed Income

  • USD began the week on wobbling legs as market participants continued to ponder the prospect of a Fed rate cut in July.
  • EUR/USD tested 3-month high as the week began but was unable to break the 1.14 level. German Jun IFO reading could not propel the Euro as the readings came in mixed overall.
  • TUR currency (Lira) was firmer by 1.5% after Turkey opposition CHP party won the Istanbul mayoral election. CHP candidate Imamoglu 9 point victory over former PM Yildirim suggested that President Erdogan’s AK Party won’t challenge the result again.
  • European bond yields remains softer with the main driver of the downward pressure being markets’ expectations of either a rate cut or some other easing measure by the ECB by September

Economic Data

  • (NL) Netherlands Q1 Final GDP Q/Q: 0.5% v 0.5% prelim; Y/Y: 1.7% v 1.7% prelim
  • (FI) Finland May PPI M/M: 0.1% v 0.1% prior; Y/Y: 0.9% v 2.0% prior
  • (CZ) Czech Jun Consumer Confidence Index: 2.8 v 2.8 prior; Business Confidence: 11.9 v 12.7 prior; Composite (Consumer & Business Confidence): 10.1 v 10.7 prior
  • (TR) Turkey Jun Real Sector Confidence: 99.6 v 94.7 prior; Real Sector Confidence: 102.5 v 98.9 prior
  • (TR) Turkey Jun Capacity Utilization: 77.1% v 76.3% prior
  • (TW) Taiwan May Industrial Production Y/Y: -3.1% v -1.5%e
  • (TW) Taiwan May Unemployment Rate: 3.8% v 3.7%e
  • (CH) Swiss Weekly Total Sight Deposits (CHF): 578.9B v 578.5B prior; Domestic Sight Deposits: 465.9B v 467.6B prior
  • (DE) Germany Jun IFO Business Climate: 97.4 v 97.4e; Current Assessment: 100.8 v 100.3e; Expectations Survey: 94.2 v 94.6e
  • (PL) Poland May Retail Sales M/M: -3.0% v -1.9%e; Y/Y: 7.3% v 8.5%e; Real Retail Sales Y/Y: 5.6% v 6.9%e
  • (PL) Poland May Construction Output Y/Y: 9.6% v 14.0%e

Fixed Income Issuance

  • None seen

Looking Ahead

  • (IT) Italy Debt Agency (Tesoro) announcement for upcoming BTP auction on Thursday, Jun 27th
  • (IL) Israel May Leading ‘S’ Indicator M/M: No est v 0.3% prior
  • 05:30 (ZA) South Africa announces details of upcoming I/L bond sale (held on Fridays)
  • 06:00 (IL) Israel May Unemployment Rate: No est v 3.8% prior
  • 06:45 (US) Daily Libor Fixing
  • 07:00 (DE) ECB’s Lautenschlaeger (Germany, SSM member)
  • 07:00 (IN) India announces details of upcoming bond sale (held on Fridays)
  • 07:25 (BR) Brazil Central Bank Weekly Economists Survey
  • 08:00 (UK) Daily Baltic Dry Bulk Index
  • 08:30 (US) May Chicago Fed National Activity Index: -0.05e v -0.45 prior
  • 08:55 (FR) France Debt Agency (AFT) to sell combined €3.8-5.0B in 3-month, 6-month and 12-month Bills
  • 09:00 (MX) Mexico Apr IGAE Economic Activity Index (Monthly GDP) M/M: 0.6%e v -0.6% prior; Y/Y: -0.4%e v 1.3% prior
  • 09:00 (BE) Belgium Jun Business Confidence: No est v -3.6 prior
  • 09:00 (CL) Chile May PPI M/M: No est v -0.1% prior
  • 09:30 (BR) Brazil May Current Account Balance: +$0.7Be v -$0.1B prior; Foreign Direct Investment (FDI): $7.8Be v $7.0B prior –
  • 10:30 (US) Jun Dallas Fed Manufacturing Activity: -2.0e v -5.3 prior
  • 11:30 (US) Treasury to sell 3-Month and 6-Month Bills
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