Notes/Observations
- G20 in focus for signs of any breakthrough on trade
- China President Xi in a meeting with African leaders ahead of the summit condemned protectionism and “bullying practices”
- Trump touts expecting to announce “very big” trade deals with both Japan and India
- BOJ alters its monthly bond-buying scheme for the 4th time this year
- European Jun inflation data continues to improve from month-ago levels (France, Italy and Euro Zone beat expectations)
Asia:
- BOJ Summary of Opinions reiterates stance that necessary to continue with powerful monetary easing as momentum toward 2% inflation is maintained
- Japan May Jobless rate: 2.4% v 2.4%e
- China President Xi stated at G20 that was seeing increases in global instability and protectionism; BRICs countries should work to protect ourselves from such risks (Note: did not directly mention the US in initial G20 remarks)
Europe/Mideast:
- UK PM candidate Johnson reportedly preparing an emergency budget for a no-deal Brexit; expected to include tax cuts and an overhaul of the stamp duty
- Russia and China agreed on payments in national currencies with agreement signed between PBoC Gov and Russia Fin Min
Americas:
- S&P affirmed United States sovereign rating at AA+; outlook Stable
- Trump administration reportedly mulling indexing capital gains taxes to inflation, could go around Congress to adopt tax change
- President Trump: Will talk about trade and disarmament with Putin; a lot of positive things will come out of very very good relationship with Russia
- White House Adviser Kudlow: US might move ahead on additional tariffs on Chinese products. Had no preconditions for Trump-Xi trade talks
- Fed’s Daly (dove, non-voter): It’s too early to say whether a rate cut is needed in July or what size it would be
SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM
Equities
- Indices [Stoxx600 +0.2% at 382.9, FTSE +0.2% at 7417, DAX +0.5% at 12323, CAC-40 +0.1% at 5500, IBEX-35 +0.1% at 9161, FTSE MIB +0.3% at 21170, SMI -0.3% at 9826, S&P 500 Futures +0.3%]
Market Focal Points/Key Themes:
- European Indices trade mixed following a generally weaker session in Asia and slightly positive US futures with the G20 in focus.
- On the corporate front shares of Costain declines over 30% following a profit warning, with Oasmia Pharma declining on results and disclosures of suspicious transactions; Craneware also declines sharply following a trading update. Hornbach Holdings gains after a rise in both profits and Revenues, with CVS Group also gaining on earnings.
- On the M&A front Merlin Entertainment rises 14% following a 455p/shr offer; BT Group declines after Orange disposed of its remaining stake, Aurelius rises 7% after the €330M sale of Solidus Group, while Bank of Ireland sold its UK credit card portfolio for £530M.
- In other news UCB declines following EMA’s negative opinion on the Marketing Authorization Application for EVENITYTM; Deutsche bank gains following the FED’s stress test results, while Paypoint falls after failing to renew its contract with British Gas.
- Looking ahead notable earners include Constellation Brands, Motorcar Parts of America and Jinkosolar.
Equities
- Consumer discretionary: Casino [CO.FR] -2.5% (Goldman Sachs cuts stake), Hornbach Holding [HBH.DE] +4% (earnings), Merlin Entertainments [MERL.UK] +14% (cash offer)
- Financials: Deutsche Bank [DBK.DE] +3% (stress test results), Paypoint [PAY.UK] -4.5% (unable to renew contract), Craneware [CRW.UK] -30% (trading update)
- Healthcare: CVS Group [CVSG.UK] +7.5% (trading update)
- Industrials: BMW [BMW.DE] -0.5% (hiring freeze), Costain [COST.UK] -35% (profit warning)
- Technology: Tele Columbus [TC1.DE] +4.5% (analyst action)
Speakers
- EU Commission and Italy said to have discussed delay to any deficit procedure until the Autumn. Discussion would see decision on possible debt procedure pushed back to September or even October but would not affect decision, as Italy could still be sanctioned
- Netherlands PM Rutte commented tat G20 that he wanted an EU consensus on next Commissioner and that it would be logical for next EU commission Chief to come from European People’s Party (EPP) but that is not the only option. Added that he himself was not planning to take a post as EU Commission Chief. Suggested that next ECB president did not come from Southern Europe, ECB presidency at the moment was not part of debate
- Italy PM Conte: govt working with EU to avoid penalty procedure
- Italy said to propose that Draghi serve as EU Commission chief
- China Foreign Ministry spokesperson Geng Shuang hoped U.S. met China halfway and ensured meeting a success
- Russia Energy Min Novak: Still in talks on future of OPEC+ deal
Currencies/ Fixed Income
- FX markets were subdues into month/quarter end with focus on the outcome of the G-20 meeting in Osaka this coming weekend.
- EUR/USD was slightly higher as European Jun inflation data continued to beat expectations. Pair trying to retest the 1.14 level. Euro region seen some stability in its data releases on the back-end of June.
- Dealers noting the softness in the greenback in recent week has sent Oil and gold staging comebacks in June best for their respective best one-month performance since January. Gold prices have risen over 8% for its best performance since the Jun 2016 Brexit vote
Economic Data
- (DE) Germany May Import Price Index M/M: -0.1% v -0.1%e; Y/Y: -0.2% v -0.2%e
- (DK) Denmark Q1 Final GDP Q/Q: 0.1% v 0.2% prelim; Y/Y: 1.9% v 2.2% prelim
- (DK) Denmark May Gross Unemployment Rate: 3.7% v 3.7% prior; Unemployment Rate: 3.0% v 3.1% prior
- (NO) Norway May Credit Indicator Growth Y/Y: 5.6% v 5.7% prior
- (FI) Finland Apr Final Trade Balance: -€0.3B v -€0.3B prelim
- (ZA) South Africa May M3 Money Supply Y/Y:9.1 % v 8.8%e; Private Sector Credit Y/Y: 7.7% v 7.7%e
- (FR) France Jun Preliminary CPI M/M: 0.2% v 0.0%e; Y/Y: 1.2% v 1.0%e
- (FR) France Jun Preliminary CPI EU Harmonized M/M: 0.3% v 0.0%e; Y/Y: 1.3% v 1.1%e
- (FR) France May PPI M/M: -0.4% v -0.8% prior; Y/Y: 0.8% v 1.9% prior
- (FR) France May Consumer Spending M/M: 0.4% v 0.3%e; Y/Y: -0.1% v +0.3%e
- (CN) Weekly Shanghai copper inventories (SHFE): 146.0K v 134.8K tons prior
- (ES) Spain Q1 Final GDP Q/Q: 0.7% v 0.7%e; Y/Y: 2.4% v 2.4%e
- (ES) Spain May Adjusted Retail Sales Y/Y: 2.4% v 1.5%e; Retail Sales Y/Y: 3.1% v 1.9% prior
- (CH) Swiss Jun KOF Leading Indicator: 93.6 v 94.8e
- (AT) Austria May PPI M/M: 0.0% v 0.2% prior; Y/Y: 0.8% v 1.4% prior
- (CZ) Czech Q1 Final GDP Q/Q: 0.6% v 0.6%e; Y/Y: 2.8% v 2.6%e
- (HU) Hungary Apr Average Gross Wages Y/Y: 9.0% v 10.6%e
- (HU) Hungary May PPI M/M: 0.5% v 1.0% prior; Y/Y: 2.7% v 4.1% prior
- (TR) Turkey May Trade Balance: -$1.8B v -$3.0B prior
- (SE) Sweden May Retail Sales M/M: -2.0% v -1.0%e; Y/Y: -0.5% v +2.3%e
- (SE) Sweden Apr Non-Manual Workers’ Wages Y/Y: 2.2% v 2.5% prior
- (TH) Thailand May Current Account Balance: -$0.4B v $1.0Be; Overall Balance of payments (BOP): -$0.6B v -$1.2B prior; Trade Account Balance: $1.4B v $0.1B prior; Exports Y/Y: -7.2% v -2.9% prior; Imports Y/Y: -0.2% v -0.4% prior
- (ES) Spain Apr Current Account Balance: -€0.4B v -€0.1B prior
- (NO) Norway Jun Unemployment Rate: 2.1% v 2.1%e
- (NO) Norway Central Bank (Norges) July Daily FX Purchases (NOK): -600M v -600M prior
- (RU) Russia Narrow Money Supply w/e Jun 21st (RUB): 10.43T v 10.46T prior
- (PL) Poland Jun Preliminary CPI M/M: 0.3% v 0.2%e; Y/Y: 2.6% v 2.4%e
- (CZ) Czech May M2 Money Supply Y/Y: 6.4% v 6.3% prior
- (UK) Q1 Final GDP Q/Q: 0.5% v 0.5%e; Y/Y: 1.8% v 1.8%e
- (UK) Q1 Final Total Business Investment Q/Q: 0.4% v 0.5%e; Y/Y: -1.5% v -1.4%e
- (UK) Q1 Current Account Balance: -£30.0B v -£32.0Be
- (PT) Portugal Jun CPI M/M: 0.0% v 0.1% prior; Y/Y: 0.4% v 0.4% prior
- (PT) Portugal Jun CPI EU Harmonized M/M: 0.4% v 0.3% prior; Y/Y: 0.7% v 0.3% prior
- (EU) Euro Zone Jun Advance CPI Estimate Y/Y: 1.2% v 1.2%e; CPI Core Y/Y: 1.1% v 1.0%e
- (IS) Iceland May Final Trade Balance (ISK): -2.6B v -16.4B prior
- (GR) Greece Apr Retail Sales Value Y/Y: -2.7% v +5.0% prior; Retail Sales Volume Y/Y: -2.0% v +5.4% prior
- (IT) Italy Jun Preliminary CPI M/M: 0.2% v 0.1%e; Y/Y: 0.8% v 0.7%e
- (IT) Italy Jun Preliminary CPI EU Harmonized M/M: 0.1% v 0.1%e; Y/Y: 0.8% v 0.7%e
Fixed Income Issuance
- None seen
Looking Ahead
- (IT) Bank of Italy (BOI) Q1 Credit Conditions
- 05:30 (SL) Sri Lanka Jun CPI Y/Y: 4.8%e v 5.0% prior
- 05:30 (IN) India to sell combined INR170B in 2021, 2026, 2031, 2039 and 2059 bonds
- 06:00 (IE) Ireland May Retail Sales Volume M/M: No est v 2.1% prior; Y/Y: No est v 4.0% prior
- 06:00 (IT) Italy May PPI M/M: No est v -0.9% prior; Y/Y: No est v 3.6% prior
- 06:00 (PT) Portugal Retail Sales M/M: No est v -1.0% prior; Y/Y: No est v 6.5% prior
- 06:00 (UK) DMO to sell €3.5B in 1-month, 3-month and 6-month bills £1.0B, £1.0B and £1.5B respectively)
- 06:45 (US) Daily Libor Fixing
- 07:30 (IN) India Weekly Forex Reserve w/e Jun 21st: No est v $422.2B prior
- 08:00 (ZA) South Africa May Trade Balance (ZAR): 0.7Be v -3.4B prior
- 08:00 (ZA) South Africa May Budget Balance (ZAR): No est v -63.5B prior
- 08:00 (BR) Brazil May National Unemployment Rate: 12.35e v 12.5% prior
- 08:00 (UK) Daily Baltic Dry Bulk Index
- 08:00 (IN) India announces upcoming bill issuance (held on Wed)
- 08:00 (ES) Spain Debt Agency (Tesoro) a announces upcoming issuance
- 08:30 (US) May Personal Income: 0.3%e v 0.5% prior; Personal Spending: 0.5%e v 0.3% prior; Real Personal Spending (PCE): 0.4%e v 0.0% prior
- 08:30 (US) May PCE Deflator M/M: 0.2%e v 0.3% prior; Y/Y: 1.5%e v 1.5% prior
- 08:30 (US)) May PCE Core Deflator M/M: 0.2%e v 0.2% prior; Y/Y: 1.5%e v 1.6% prior
- 08:30 (CA) Canada Apr GDP M/M: 0.2%e v 0.5% prior; Y/Y: 1.5%e v 1.4% prior
- 08:30 (CA) Canada May Industrial Product Price M/M: -0.1%e v +0.8% prior; Raw Materials Price Index M/M: -3.0%e v +5.6% prior
- 09:00 (RU) Russia Q1 Final Current Account Balance: No est v $32.8B prelim
- 09:00 (CL) Chile May Unemployment Rate: 7.1%e v 6.9% prior
- 09:00 (CL) Chile May Industrial Production Y/Y: 0.4%e v 0.7% prior; Manufacturing Production Y/Y: +0.4%e v -1.4% prior; Total Copper Production: No est v 462.1K tons prior
- 09:30 (BR) Brazil May Primary Budget Balance (BRL): -16.1Be v +6.6B prior; Nominal Budget Balance: -49.5Be v -28.0B prior; Net Debt to GDP Ratio: 54.4%e v 54.2% prior
- 09:45 (US) Jun Chicago Purchasing managers (PMI): 53.5e v 54.2 prior
- 10:00 (US) Jun Final University of Michigan Confidence: 98.0e v 97.9 prelim
- 10:00 (MX) Mexico May Net Outstanding Loans (BRL): No est v 4.562T prior
- 10:30 (CA) Bank of Canada (BOC) Q2 Senior Loan Survey: No est v -2.7 prior; Future Outlook sales: No est v 6.0 prior
- 11:00 (CO) Colombia May National Unemployment Rate: No est v 10.3% prior; Urban Unemployment Rate: 10.8%e v 11.% prior
- 11:00 (EU) Potential sovereign ratings after European close (Fitch on Sweden)
- 14:00 (CO) Colombia Central Bank Jun Minutes
Weekend
- (JP) G20 leaders meeting to be held in Osaka
- (G20): Trump-Xi meeting in Osaka
