Notes/Observations

Stronger German regional CPI data add to bets of ECB tapering

Bond yields soar, EUR/USD hits new 1 year highs

- advertisement -

Banking names outperform on reflation hopes and positive sympathy from US stress test results

European business and consumer optimism rises to the highest levels since before the financial crisis

Overnight

Asia:

Japan retail sales fall for the first time in 5 months and falls short of estimates

New Zealand June ANZ Business confidence rises to 8 month high

Europe:

German regional inflation data comes in stronger pushing German Yields to new multi month highs. Euro pushes above 1.14 marking new 1 year highs.

Eurozone Economic sentiment indicator reaches 10 year high, whilst German GFK consumer confidence post new 16 year high.

BoE Haldane reiterates hawkish stance, noting that the BoE needs to seriously look at raising rates

Americas:

Fed did not object to the capital plans of all 34 bank holding companies participating in the Comprehensive Capital Analysis and Review (CCAR). Capital One is the only bank that will need to resubmit within six months, although its plan was not entirely rejected.

Brazil President Temer said to name Raquel Dodge as new top prosecutor; Temer’s residence subsequently attacked (Temer not inside)

Brendan Carr expected to be nominated to a position at the FCC by President Trump as soon as today

Economic Data

(DE) GERMANY JUN CPI SAXONY M/M: 0.2% V -0.1% PRIOR; Y/Y: 1.7% V 1.6% PRIOR

(DE) GERMANY JUN CPI NORTH RHINE WESTPHALIA M/M: 0.1% V -0.2% PRIOR; Y/Y: +1.6% V 1.6% PRIOR

(DE) GERMANY JULY GFK CONSUMER CONFIDENCE: 10.6 V 10.4E (highest since 2001)

(UK) MAY NET CONSUMER CREDIT: £1.7B V £1.4BE; NET LENDING: £3.5B V £2.6BE

(UK) MAY MORTGAGE APPROVALS: 65.2K V 64.0KE

(UK) May M4 Money Supply M/M: -0.1% v 1.2% prior; Y/Y: 6.7% v 8.2% prior

(DE) Germany Jun CPI Brandenburg M/M: 0.2 v -0.1% prior; Y/Y: 1.5% v 1.4% prior

(DE) Germany Jun CPI Bavaria M/M: 0.1% v -0.1% prior; Y/Y: 1.4% v 1.4% prior

(DE) Germany Jun CPI Baden Wuerttemberg M/M: 0.1% v -0.1% prior; Y/Y: 1.6% v 1.5% prior

(DE) Germany Jun CPI Hesse M/M: 0.1% v 0.0% prior; Y/Y: 1.9% v 1.7% prior

(ES) SPAIN JUN PRELIMINARY CPI M/M: 0.0% V 0.0%E; Y/Y: 1.5% V 1.6%E

(EU) EURO ZONE JUN BUSINESS CLIMATE INDICATOR: 1.15 V 0.94E, FINAL CONSUMER CONFIDENCE -1.3 V -1.3E

(ES) Spain Apr Total Mortgage Lending Y/Y: -11.4% v 23.1% prior; House Mortgage Approvals Y/Y: -8.8% v 20.2% prior

(SE) Sweden May Retail Sales M/M: 0.4% v 0.2%e; Y/Y: 2.4% v 1.9%e

Fixed Income Issuance:

Non seen

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

Indices [Stoxx50 -0.1% at 3,534, FTSE +0.6% at 7,431, DAX +0.1% at 12,657, CAC-40 -0.3% at 5,234, IBEX-35 –0.1% at 10,686, FTSE MIB -0.2% at 21,014, SMI -0.4% at 9,035, S&P 500 Futures +0.1%]

Market Focal Points/Key Themes: European stocks opened higher, but turned around as the session advanced; risk sentiment improved after clarification on ECB’s Draghi comments; financials supported following US stress test results; oil continues to support energy stocks; materials higher on the back of better base and precious metals; technology also outperforming; attention turning to tomorrow’s NFP release; upcoming US earnings include GreenBrier, Rite Aid and Walgreens

Equities

Consumer discretionary [Hennes & Mauritz HMB.SE -1.0% (earnings), JD Sports JD.UK -9.7% (trading update)]

Healthcare [Paion PA8.DE -6.2% (drug update)]

Financials [Prelios PRS.IT -4.7% (receives offer), Flow Traders FLOW.NL -6.6% (analyst action)]

Industrials [DS Smith SMDS.UK +6.6% (earnings, acquisition), Gesco GSC1.DE 3.4% (prelim Q1), OCI OCI.NL +6.3% (rejects offer), Babckock BAB.UK +1.3% (contract award), John Wood Group WG.UK -2.9% (trading update)]

Technology [Logitech International LOGN.CH -0.4% (dividend hike)]

Speakers

(JP) BoJ’s Harada: Monetary policy does not raise risk of a yield spike; Does not see any need to ease at this point, current monetary policy is sufficiently bold

(UK) BOE’s Haldane (chief economist): BOE needs to serious look at raising rates, is happy with where they are now

Currencies

EURUSD soars to new one year highs following stronger inflation data out of Germany. Dealers note upside target of 1.1453.

GBPUSD approaches 1.30 continuing momentum following BoE Carney hawkish comments yesterday which saw 100 pip move higher. Dealers not resistance just ahead of 1.30, with a move lower seeing suppoer at 1.2950.

Fixed Income

Bund futures trade at 162.86 down 59 ticks taking out yesterday lows on stronger regional German inflation data, with the Draghi inspired downtrend continuing with downside support seen at 162.39 then 161.90.

Thursday’s liquidity report showed Wednesday’s excess liquidity rose to €1.634T a rise of €16B from €1.618T prior. Use of the marginal lending facility fell to €100M from €192M prior.

Corporate issuance saw $1.8B come to market in a quiet session with Baidu’s $1.5B 2 part offering accounting for the bulk if the issuance. Issuance for the remainder of the week is expected to remain slow as we approach US July 4th Holidays.

Looking Ahead

05:30 (ZA) South Africa May PPI M/M: 0.5%e v 0.3% prior; Y/Y: 4.9%e v 4.6% prior

07:00 (CZ) Czech Central Bank (CNB) Interest Rate Decision: Expected to leave Repurchase Rate unchanged at 0.05%

07:00 (BR) Brazil Jun FGV Inflation IGPM M/M: -0.6%e v -0.9% prior; Y/Y: -0.8%e v +1.6% prior

08:00 (DE) Germany Jun Preliminary CPI M/M: +0.1%e v -0.2% prior; Y/Y: 1.5%e v 1.5% prior

08:00 (DE) Germany Jun Preliminary CPI EU Harmonized M/M: 0.0%e v -0.2% prior; Y/Y: 1.3%e v 1.4% prior

08:15 (UK) Baltic Dry Bulk Index

08:30 (US) Q1 Final GDP Annualized (3rd reading) Q/Q: 1.2%e v 1.2% prelim; Personal Consumption: 0.6%e v 0.6% prelim

08:30 (US) Q1 Final GDP Price Index: 2.2%e v 2.2% prelim; Core PCE Q/Q: No est v 2.1% prior

08:30 (US) Initial Jobless Claims: No est v 241K prior; Continuing Claims: No est v 1.944M prior

08:30 (US) Weekly USDA Net Export Sales

09:00 (RU) Russia Gold and Forex Reserve w/e Jun 23rd: No est v $406.4B prior

10:30 (US) Weekly EIA Natural Gas Inventories

15:00 (AR) Argentina May Industrial Production Y/Y: No est v -2.3% prior, Construction Activity Y/Y: No est v 10.5% prior

Previous articleEUR And GBP Broadly Higher Amid Tightening Rumour
Next articleTechnical Outlook: AUDUSD At 3-Month High, Further Upside Favored
All information provided by Trade The News (a product of Trade The News, Inc. "referred to as TTN hereafter") is for informational purposes only. Information provided is not meant as investment advice nor is it a recommendation to Buy or Sell securities. Although information is taken from sources deemed reliable, no guarantees or assurances can be made to the accuracy of any information provided. 1. Information can be inaccurate and/or incomplete 2. Information can be mistakenly re-released or be delayed, 3. Information may be incorrect, misread, misinterpreted or misunderstood 4. Human error is a business risk you are willing to assume 5. Technology can crash or be interrupted without notice 6. Trading decisions are the responsibility of traders, not those providing additional information. Trade The News is not liable (financial and/or non-financial) for any losses that may arise from any information provided by TTN. Trading securities involves a high degree of risk, and financial losses can and do occur on a regular basis and are part of the risk of trading and investing.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.