HomeContributorsFundamental AnalysisBund Yields Rebound Sharply On Better European Data

Bund Yields Rebound Sharply On Better European Data

Notes/Observations

Asia:

  • Japanese Chip names trade lower from uncertainty regarding relations with South Korea
  • Australian Consumer confidence hits 2 year low as deepening concerns about the economic outlook weigh

Europe/Mideast:

  • EU cuts Eurozone, Germany and French 2020 GDP forecasts; Cuts Eurozone 2019 and 2020 inflation forecasts
  • German Bund yields rebound as French Industrial production handily beats estimates
  • UK data continues to disappoint, with Industrial and manufacturing production data missing forecasts, while monthly GDP for May did swing back to positive reading after contracting in April.
  • UK Parliament narrowly votes in favor of MP Grieve’s amendment which aims to prevent no-deal Brexit

Americas:

  • Markets await Fed’s Powell Testimony later today

Energy

  • Crude prices rise as API inventories showed a larger then expected draw down
  • Multiple energy companies announce evacuations and production cuts at Gulf of Mexico platforms due to storm threat

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

  • Indices [Stoxx600 -0.19% at 387.20, FTSE 0.08% at 7,530.51, DAX -0.32% at 12,396.98, CAC-40 -0.12% at 5,565.49, IBEX-35 -0.06% at 9,268.05, FTSE MIB +0.78% at 22,058.50, SMI -0.25% at 9,927.50, S&P 500 Futures -0.19%]

Market Focal Points/Key Themes:

Equities

  • European Indices trade mostly lower across the board after sligly weak session in Asia and dissapointing U.K. industrial production data. Meanwhile S&P 500 futures trade almost unchanged.
  • In corporate news, shares of PageGroup and its peers in the U.K. trade sharply lower warning on operating profit and citing worsening macro conditions for its business. Interroll trades almost 15% lower in Switzerland after it reported results & guided business dynamic to slowdown in H2. Redx Pharma and Jazz Pharmaceuticals entered into takeover agreement on pre-clinical inhibitor program; shares of Redx Pharma currently trade ~140% higher.
  • In other news, Leoni in Frankfurt erases earlier gains and trades rougly flat after disclosing plans to spin off or prepare IPO of a unit. Cyan trades more than 10% lower on placement announcement.
  • Looking ahead notable earners include MSC Industrial Direct and AngioDynamics.
  • Consumer discretionary: PageGroup [PAGE.UK] -13%, Hays [HAS.UK] -6% (PageGroup’s earnings), Superdry [SDRY.UK] -2.5% (earnings)
  • Financials: Gam Holding [GAM.CH] +6% (earnings)
  • Healthcare: Redx Pharma [REDX.UK] +142% (divests program)
  • Industrials: Leoni [LEO.DE] +1% (spin off plans)
  • Technology: Interroll [INRN.CH] -14% (earnings), Xeros Technology Group [XSG.UK] +28% (patent), Cyan [CYR.DE] -11% (placing)

Speakers

  • Ireland Fin Min Donohoe: stated that prospects of a disorderly Brexit is now a significant risk
  • South Korea Foreign Ministry spokesperson: To raise issue on Japan export curbs at WTO meeting
  • South Korea Industry Min urged Japan to immediately stop making groundless claims. Considering every possible measure against Japan’s export curbs and could hold talks on trade with South Korea on Friday, July 12th
  • (TR) Turkish Foreign Ministry: Has not yet received response from the US regarding proposal for working group on S-400S
  • (IQ) Iraq Oil Min Ghadhban: Recent OPEC+ deal extensions will help to lower OIl inventories from market

Currencies/ Fixed Income

  • USD: The USD Index Futures traded higher yesterday for the 4th straight time as the market awaits Powell’s testimony due today, where the markets look to his comments for a rate cut.
  • EUR: The Euro trades slightly above 1.12 as the week has no major data expected. Traders will look for unscheduled comments or the USD to move the pair.
  • GBP: The cable trades higher today as it eases off its recent continuous slide. This trade higher is seen after GDP met expectations and getting back on the positive side.
  • MXN: Yesterday the Peso weakened against the USD as the pair traded up over 2% as the Finance Minister Urzua resigns. The pair now trade just above 19.15.

Economic Data

  • (UK) MAY INDUSTRIAL PRODUCTION M/M: 1.4% V 1.5%E; Y/Y: 0.9% V 1.2%E
  • (UK) MAY GDP M/M: 0.3% V 0.3%E
  • (UK) MAY VISIBLE TRADE BALANCE: -ÂŁ11.5B V -ÂŁ12.6BE
  • (UK) May Index of Services M/M: 0.0% v 0.1%e; 3M/3M: 0.3% v 0.1%e
  • (NL) Netherlands May Manufacturing Production M/M: -0.5% v -0.6% prior; Y/Y: -1.8% v -1.2% prior
  • (FI) Finland May Industrial Production M/M: -2.8% v 2.6% prior; Y/Y: -0.3% v 7.0% prior
  • (FR) FRANCE MAY INDUSTRIAL PRODUCTION M/M: 2.1% V 0.3%E; Y/Y: 4.0% V 1.6%E
  • (NO) Norway Jun CPI M/M: 0.1% v 0.2%e; Y/Y: 1.9% v 2.1%e
  • (RO) Romania Jun CPI M/M: -0.2% v -0.2%e; Y/Y: 3.8% v 4.0%e
  • (DK) Denmark Jun CPI M/M: -0.2% v -0.1% prior; Y/Y: 0.6% v 0.7%e
  • (IT) Italy May Industrial Production M/M: 0.9% v 0.2%e; Y/Y: -0.7% v -1.5%e
  • (GR) Greece Jun CPI Y/Y: -0.3% v 0.2% prior; CPI EU Harmonized Y/Y: 0.2% v 0.6% prior

Fixed Income Issuance

  • (DK) Denmark sells total DKK6.0B in 3 and 6 month bills
  • Sweden sells SEK5B in 3-month bills; Avg Yield: -0.4399% v -0.4578% prior
  • (IT) Italy Debt Agency (Tesoro) sells €6.5B vs. €6.5B indicated in 12-month bills; Avg Yield: % v 0.069% prior; Bid-to-cover: 1.47x v 1.54x prior

Looking Ahead

  • 06:00 (IL) Israel Jun Consumer Confidence: No est v 127 prior
  • 06:00 (IE) Ireland Jun CPI M/M: No est v -0.1% prior; Y/Y: No est v 1.0% prior
  • 06:00 (IE) Ireland Jun CPI EU Harmonized M/M: No est v -0.1% prior; Y/Y: No est v 1.0% prior
  • 06:00 (IE) Ireland May Property Prices M/M: No est v 0.3% prior; Y/Y: No est v 3.1% prior
  • 06:00 (PT) Portugal Jun Final CPI M/M: No est v 0.0% prelim; Y/Y: No est v 0.4% prelim
  • 06:00 (PT) Portugal Jun Final CPI EU Harmonized M/M: No est v 0.4% prelim; Y/Y: No est v 0.7% prelim
  • 06:00 (PT) Portugal May Trade Balance: No est v -€1.8B prior
  • 06:00 (IE) Ireland Jun CPI M/M: No est v -0.1% prior; Y/Y: No est v 1.0% prior
  • 06:00 (IE) Ireland Jun CPI EU Harmonized M/M: No est v -0.1% prior; Y/Y: No est v 1.0% prior
  • 07:00 (US) MBA Mortgage Applications w/e July 5th: No est v -0.1% prior
  • 07:00 (BR) Brazil July IGP-M Inflation (1st Preview): 0.6%e v 0.7% prior
  • 08:00 (HU) Hungary Central Bank’s July Minutes
  • 08:30 (CL) Chile Central Bank Economists Survey
  • 10:00 (CA) Bank of Canada (BOC) Interest Rate Decision: Expected to leave Interest rate unchanged at 1.75%
  • 10:00 (US) May Final Wholesale Inventories M/M: 0.4%e v 0.4% prelim; Wholesale Trade Sales M/M: +0.3%e v -0.4% prior;
  • 10:30 (US) Weekly DOE Oil Inventories
  • 14:00 (US) FOMC Jun Minutes
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