• Focus on upcoming G20; will US and China agree on no new tariffs as a goodwill gesture???
  • Euro region confidence data mixed (Beat: France; Miss: Germany)
  • UK Tory candidate Johnson toughened his Brexit rhetoric with a “do or die” pledge to leave the European Union on Oct. 31st (shifted his rhetoric on Tuesday to a tougher no-deal stance)


  • New Zealand Central Bank (RBNZ) left the Official Cash rate (OCR) unchanged at 1.50% (as expected) and noted that a lower OCR might be needed over time due to downside risks
  • G20 draft communique called for promotion of free trade as a means for strong global economic growth; called for need to create positive economic cycle of growth and distribution (will not explicitly oppose protectionism due to opposition from US)
  • China Q2 Beige Book notes domestic economy showed modest improvement, manufacturing and retail outperformed; Risks ahead looked more serious


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  • New UK PM to be announced on July 23rd
  • ECB did not object to thrust of League’s law proposal to clarify that Bank of Italy gold belongs to the state; ECB suggests amendment to proposal. Said to ask the Italy’s League to remove the reference to the Bank of Italy holding gold as an ‘exclusive title of deposit’
  • Germany Chancellor Merkel hoped EU Parliament selected candidates by midweek; called for an EU Commission solution by June 30th


  • Fed Chair Powell: Monetary policy shouldn’t overreact to short-term swings in sentiment. To look at the overall situation and want to see more; It’s important not to overreact in the short term
  • Fed’s Bullard (dove, voter, dissenter): Think 2 rate cuts before the end of the year would ensure a soft landing, move policy from slightly restrictive to slightly accomodative; if Fed does cut rates in July do not feel a need to also end reduction in the balance sheet since that is already going to end in Sept. Believed that a 50bps cut in July would be overdone; 50bps cut is not called for right now. Doesn’t like suggesting that Fed will go as next meeting as proper tactic; if conditions are right for a cut, we should just cut
  • Fed’s Barkin (hawk, non-voter): Fed policy stance is modestly accommodative; doesn’t know whether rates should be cut this year. Fed wants to be ready to adjust to a fragile environment
  • Senior Trump Administration official: no broad trade deal was expected to be made at the G20 meeting between Trump and Xi; US not willing to come to the Trump-Xi meeting with concessions on trade; It’s possible that US and China might agree on no new tariffs as a goodwill gesture, but not clear if that would happen


  • Weekly API Oil Inventories: Crude: -7.6M v -0.8M prior
  • Iran Dep Foreign Min: Iran has no reason left to carry out nuclear deal commitments unilaterally
  • Iran President Rohani reiterated stance that Iran is not looking for war with the US
  • Philadelphia Energy Solutions expected to permanently close oil refinery after recent fire (largest refinery on east coast); US gasoline futures rise over 5%



  • Indices [Stoxx600 -0.19% at 382.66, FTSE -0.05% at 7,418.75, DAX +0.2% at 12,231.00, CAC-40 -0.1% at 5,508.00, IBEX-35 +0.31% at 9,190.00, FTSE MIB -0.18% at 21,090.50, SMI -0.29% at 9,863.50, S&P 500 Futures +0.17%]
  • Market Focal Points/Key Themes: European Indices trade mixed as following a mixed session in Asia and higher US futures, following weakness yesterday, ahead of the G-20 meeting in Japan later this week. On the corporate front shares of RM2 International declines almost 80% after the company provides a funding update noting the likely suspension of shares; whilst DIA in Spain gains over 15% after reaching an agreement with lenders for an additional €271M in financing. On the corporate front John Wood Group gains after a trading update in which the outlook was affirmed; Stagecoach gains after rise profits despite a sharp fall in Revenues. Meanwhile RPS group declines over 30% following a profit warning, with Bonmarche also declining sharply after continued weakness in clothing business. Elsewhere Bunzl declines following a trading update, with Kappahl, Zoo Digital and Air Partner among other decliners after earnings and trading updates. In other news Brenntag declines on reports that company sold chemicals to Syria using a Swiss subsidiary in 2014, while EU chipmakers gain in sympathy with the stronger results from Micron after the close. Looking ahead notable earners include Blackberry, General Mills and Paychex among others.


  • Consumer discretionary: John Wood Group [WG.UK] +5.5% (trading update), Bunzl [BNZL.UK] -1.5% (trading update), RPS Group [RPS.UK] -35% (profit warning), RM2 International [RM2.UK] -76% (trading update), Bonmarche Holdings [BON.UK] -22.5% (trading update)
  • Consumer staples: British American Tobacco [BATS.UK] -0.5%, Imperial Brands [IMB.UK] +1% (San Francisco becomes the first US city to ban sales of e-cigarettes that have not been approved by the FDA)
  • Healthcare: Faron Pharmaceuticals [FARN.UK] -15% (study results)
  • Industrials: ThyssenKrupp [TKA.DE] +6% (interest speculation), Norma [NOEJ.DE] -2.5% (analyst action), Brenntag [BNR.DE] -4% (press report on Syria), DIA [DIA.ES] +14% (financing)
  • Technology: AMS [AMS.CH] +3%, Infineon [IFX.DE] +0.5%, Dialog Semiconductor [DLG.DE] -0.5% (in sympathy with Micron earnings)


  • France President Macron: G20 communique must mention the Paris climate accord; topic is a ‘red line’
  • Iceland Central Bank (Sedlabanki) policy statement noted that contraction in the domestic economy was still anticipated and was expected to show more clearly in coming months
  • Thailand Central bank Policy Statement noted that the vote to keep policy steady was unanimous. Reiterated stance that monetary policy remained accommodative. THB currency (Baht) strength might not be in-line with economic fundamental. MPC to follow economic situation and fund inflows closely
  • South Korea President Moon: US had proposed working level talks with North Korea. Behind the scene talks for a possible 3rd summit between US-NK
  • Japan PM Abe reiterates stance that would not hesitate to counter any economic downside risks via flexible steps. Expected US-China to resolve the trade dispute through constructive dialogue
  • China Foreign Ministry spokesperson Geng Shuang urged Britain to stop interfering in Hong Kong affairs. Reiterated stance that Canada should release Hauwei CFO Meng Wanzhou
  • Supreme leader Khameni: “Enemy pressure’ would have no impact
  • US Treasury Sec Mnuchin: Sanctions were working against Iran

Currencies/ Fixed Income

  • The USD held on to recent gains over the past 24 hours after several Fed officials pushed back on aggressive US rate cut views. Fed dove (and dissenter) Bullard noted on Tuesday that a 50 basis points cut in July would be overdone. Fed chief Powell stopped short of saying a cut was guaranteed next month.
  • NZD currency (Kiwi) saw some volatility after the RBNZ left the key rate unchanged but hinted of more cuts down the road. The kiwi did initially weakened after the central bank noted that it did discuss a rate cut earlier today but tempered the losses afterwards. NZD/USD higher by 0.5% just ahead of the NY morning at 0.6670 area

Economic Data

  • (DE) Germany July GfK Consumer Confidence: 10.0e
  • (NO) Norway Apr AKU Unemployment Rate: 3.2% v 3.6%e
  • (DK) Denmark May Retail Sales M/M: -0.3% v -0.5% prior; Y/Y: -0.7% v +3.1% prior
  • (FR) France Jun Consumer Confidence: 101 v 100e
  • (TH) Thailand Central Bank (BOT) left its benchmark Interest Rate unchanged at 1.75% (as expected)
  • (AT) Austria Jun Manufacturing PMI: 47.5 v 48.3 prior – (PL) Poland May Unemployment Rate: 5.4% v 5.4%e
  • (IT) Italy Q1 Budget Deficit to GDP: 4.1% v 2.1% prior
  • (CH) Swiss Jun Credit Suisse Expectations Survey: -30.0 v -14.3 prior
  • (UK) May BBA Finance Loans for Housing: 42.4K v 41.0Ke
  • (IS) Iceland Central Bank (Sedibanki) cut the 7-Day Term Deposit Rate by 25bps to 3.75% (2nd straight rate cut)
  • (IS) Iceland Jun CPI M/M: 0.4% v 0.2% prior; Y/Y: 3.3% v 3.6% prior

Fixed Income Issuance

  • (AT) Austria Debt Agency (AFFA) opened its book to sell 2047 and 2117 RAGB bonds via syndicate
  • (IN) India sold total INR200B vs. INR200B indicated in 3-month, 6-month and 12-month bills
  • (IT) Italy Debt Agency (Tesoro) sold €6.0B vs. €6.0B indicated in 6-month bills; Avg Yield: -0.063% v -0.048% prior; Bid-to-cover: 1.41x v 1.65x prior
  • (NO) Norway sold NOK2.0B vs. NOK2.0B indicated in 1.75% Feb 2027 bonds; Avg Yield: 1.36% v 1.63% prior; Bid-to-cover: 2.33x v 5.4x prior

Looking Ahead

  • 05:30 (EU) ECB LTRO 3-month allotment
  • 05:30 (ZA) South Africa announces details of next bond auction (held on Tuesdays)
  • 06:00 (CZ) Czech Republic to sell 2033 and 2057 bonds
  • 06:00 (RU) Russia OFZ bonds auction
  • 06:45 (US) Daily Libor Fixing
  • 07:00 (US) MBA Mortgage Applications w/e Jun 21st: No est v -3.4% prior
  • 07:00 (CZ) Czech Central Bank (CNB) Interest Rate Decision: Expected to leave Repurchase Rate unchanged at 2.00%
  • 07:00 (BR) Brazil Jun FGV Construction Costs M/M: No est v 0.0% prior (revised from 0.1%)
  • 08:00 (UK) Daily Baltic Dry Bulk Index
  • 08:15 (CZ) Czech Central Bank Gov Rusnok to hold post Rate Decision press conference
  • 08:30 (US) May Preliminary Durable Goods Orders: -0.2%e v -2.1% prior; Durables (ex-transportation): 0.1%e v 0.0% prior; Capital Goods Orders (Non-defense/ex-aircraft): 0.1%e v -1.0% prior; Capital Goods Shipments (Non-defense/ex-aircraft): 0.1%e v 0.0% prior
  • 08:30 (US) May Advance Goods Trade Balance: -$71.8Be v -$72.1B prior
  • 08:30 (US) May Preliminary Wholesale Inventories M/M: 0.5%e v 0.8% prior; Retail Inventories M/M: 0.3%e v 0.5% prior
  • 08:30 (CL) Chile Central Bank Traders Survey
  • 09:00 (MX) Mexico May Unemployment Rate (Seasonally Adj): 3.5%ev 3.5% prior; Unemployment Rate NSA (unadj): 3.5%e v 3.5% prior
  • 09:00 (BR) Brazil May Total Federal Debt (BRL): No est v 3.879T prior
  • 09:30 (BR) Brazil May Total Outstanding Loans (BRL): No est v 3.27T prior; M/M: No est v 0.0% prior; Personal Loan Default Rate: No est v 4.7% prior
  • 10:30 (US) Weekly DOE Oil Inventories
  • 11:30 (US) Treasury to sell 2-Year Floating Rate Notes Reopening
  • 12:00 (CA) Canada to sell 2 Year Bonds
  • 13:00 (US) Treasury to sell 5-Year Notes
  • 13:30 (BR) Brazil May Central Govt Budget Balance (BRL): -17.5Be v +6.5B prior
  • 15:00 (AR) Argentina Apr Economic Activity Index (Monthly GDP) M/M: No est v -1.3% prior; Y/Y: -2.9%e v -6.8% prior
  • 15:00 (AR) Argentina Q1 Current Account Balance: -$2.7Be v -$2.3B prior
  • 15:00 (AR) Argentina Trade Balance: $1.1Be v $1.1B prior


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