• Various stimulus measures and planned reopening of global economy supporting a risk-on mood (ECB’s PEPP increase on Thurs, Malaysia 2nd stimulus package)
  • China vowed countermeasures to recent US economic restrictions on 33 Chinese companies
  • EU Brexit Negotiator Barnier to hold press conference on recent UK-EU trade relationship talks
  • Focus on another dismal US jobs report due to lockdown measures


  • Australia PM Morrison announced new foreign investment rules noting that it must be in our interest and on our terms
  • New Zealand Fin Min Robertson: New Zealand economy seems to be recovering “quicker”; Retail sales have picked up well
  • Japan govt preparing to lift quarantines for business travelers in summer; will prioritize visitors from Thailand, Vietnam, New Zealand, and Australia first
  • Hong Kong Monetary authority (HKMA) has sold HKD against USD to defend the band


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  • Germany Economic Advisory Panel sees 2020 GDP contracting between 6-7% due to coronavirus
  • UK May Final GfK Consumer Confidence: -36 v -34e (Lowest reading in Jan 2009)


  • USTR Lighthizer: still feel very good about the Phase 1 trade deal with China; China has done a good job with the trade deal amid the coronavirus crisis
  • Sec of State Pompeo will warn in a speech today against American investors from ‘fraudulent’ accounting practices of Chinese companies



  • Indices [Stoxx600 +1.38% at 371.30, FTSE +1.20% at 6,417.49, DAX +2.01% at 12,680.35, CAC-40 +2.12% at 5,118.06, IBEX-35 +2.66% at 7,768.00, FTSE MIB +1.99% at 20,024.50, SMI +0.53% at 10,129.09, S&P 500 Futures +0.90%]
  • Market Focal Points/Key Themes: European indices open broadly positive and continued higher as the session progressed; sectors leading gains include financials and energy; healthcare sector among underperformers; reportedly Italy considering measures to protect Generali from takeover; Deutsche Wohnen to replace Lufthansa on DAX index; earnings expected in the upcoming US session include Tiffany’s and Tribune Publishing


  • Consumer discretionary: Taylor Wimpey [TW.UK] +5% (business update), Lufthansa [LHA.DE] -4% (leaving Dax evening; analyst action), Stobart Group [STOB.UK] -32% (placement)
  • Financials: LSL Property Services [LSL.UK] +21% (trading update)


  • ECB’s De Cos (Spain): Rising deflation risk warranted more stimulus. Capital key is not a constraint in short run
  • ECB’s Panetta (Italy): Lockdowns conditions had created deflationary risks
  • ECB Vasle (Slovenia): Recent economic data convinced the need for action. The €600B increase in Pandemic bond buying is the proper amount to achieve our inflation goal
  • ECB’s Lane (Ireland, chief economic): amount of increase in the Pandemic Bond Buying scheme (PEPP) was proportionate response to outlook
  • ECB’s Weidmann (Germany) commented that the low point in German growth appeared to have passed in Apr . He added that fiscal support appropriate
  • German Bundesbank updated its growth outlook which cut the 2020 GDP from +0.6% to -7.1%. Raised 2021 GDP growth from 1.4% to 3.2% and raised 2022 GDP growth from 1.4% to 3.8%
  • Germany Econ Min Altmaier: reiterated stance that expected tough negotiations regarding EU Recovery Fund
  • EU Economic Commissioner Gentiloni (Italy): Expected that EU leaders to have an agreement on the EU Recovery Package by July
  • Portugal Fin Min Centeno stated that it would not cut taxes in upcoming supplemental budget
  • Austria Debt Agency (AFFA) raised its 2020 issuance to €60.0B (approx double the original plan)
  • EU’s Jourova: EU still weighing its response to recent German court ruling on Bundesbank QE purchases
  • BOJ said to likely maintain its view than domestic economy to gradually recover in latter half of 2020
  • China Commerce Ministry (MOFCOM) said to vow countermeasures against recent US action on 33 Chinese entities. To protect legal rights of Chinese companies
  • OPEC and OPEC+ meetings reportedly scheduled for Sat, June 6th (tomorrow)

Currencies/ Fixed Income

  • The USD continued its soft tone as safe-haven flows were unwound. Recent announcement of stimulus measures and planned reopening of the global economy aiding the sentiment. Some comments from China’s MOFCOM on possible countermeasurs to US companies did stem some of the risk-on euphoria seen in the session. Greenback testing multi-month lows but remain within the 2020 trading range against the major pairs.
  • EUR/USD approached the 1.14 handle consolidating its gains. pair at 1.1335 in mid-session.
  • USD/JPY holding above the 109 handle.
  • Focus on an update out of the EU on the recent trade relationship talks with UK. The week had seen some optimism bubble on compromise on key issues like fisheries. GBP/USD at 1.2650 ahead of the Barnier press conference

Economic Data

  • (DE) Germany Apr Factory Orders M/M: -25.8% v -19.9%e; Y/Y: -36.6% v -29.7%e
  • (NO) Norway Apr Overall GDP M/M: -4.0% v -5.7% prior; Mainland GDP M/M: -4.7% v -6.9% prior
  • (NO) Norway Apr Industrial Production M/M:-0.8 v +1.4% prior; Y/Y: 5.4% v 7.6% prior
  • (NO) Norway Apr Manufacturing Production M/M: -1.6% v -3.0% prior; Y/Y: -5.1% v -1.3% prior
  • (ZA) South Africa May Gross Reserves: $52.8B v $53.5Be; Net Reserves: $45.5B v $45.9Be
  • (AU) Australia May Foreign Reserves: A$60.8B v A$63.2B prior
  • (ES) Spain Apr Industrial Output NSA Y/Y: -33.6 v-11.7% prior; Industrial Output SA Y/Y: -33.6 v -13.7 prior; Industrial Production M/M: -21.8% v -9.5%e
  • (CH) Swiss May Foreign Currency Reserves (CHF): 816.3B v 801.0B prior
  • (AT) Austria May Wholesale Price Index M/M: -0.7% v -1.7% prior; Y/Y: -7.9% v -6.9% prior
  • (CZ) Czech Apr Retail Sales Y/Y: -21.2% v -29.9%e; Retail Sales (ex-auto) Y/Y: -10.6% v -19.5%e
  • (HU) Hungary Apr Industrial Production M/M: -30.5% v -14.0%e; Y/Y: -36.6% v -25.0%e
  • (MY) Malaysia End-May Foreign Reserves: $102.9B v $102.6B prior
  • (UK) May Halifax House Price Index M/M: -0.2% v -0.6% prior; 3M/Y: 2.6% v 2.7% prior
  • (SE) Sweden May Budget Balance (SEK): +10.2B v -38.9B prior
  • (RU) Russia Narrow Money Supply w/e May 29th (RUB): 12.38T v 12.39T prior
  • (IT) Italy Apr Retail Sales M/M: -10.5% v -20.0%e; Y/Y: -26.3% v -18.9% prior
  • (TW) Taiwan May CPI Y/Y: -1.2% v -1.1%e; CPI Core Y/Y: 0.1% v 0.1%e; WPI Y/Y: -11.6% v -10.6%e
  • (TW) Taiwan May Foreign Reserves: $484.5B v $481.8B prior
  • (CZ) Czech May Unemployment Rate: 3.6% v 3.6%e
  • (GR) Greece Apr Industrial Production Y/Y: No est v +0.6% prior
  • (IS) Iceland May Preliminary Trade Balance (ISK): No est v -0.4B prior

Fixed Income Issuance

  • (IN) India sold total INR340B vs. INR300B indicated in 2022, 2030, 2031 and 2060 bonds

Looking Ahead

  • 05:30 (ZA) South Africa to sell combined ZAR1.40B in I/L2029, 2038 and 2050 Bonds
  • 05:30 Poland switch auction
  • 06:00 (IE) Ireland Q1 GDP Q/Q: No est v 1.8% prior; Y/Y: No est v 6.2% prior
  • 06:00 (IE) Ireland May Live Register Monthly Change: No est v +7.5K prior; Live Register Level: No est v 216.9K prior
  • 06:00 (UK) DMO to sell £3.5B in 1-month, 3-month and 6-month bills (£0.5B, £1.0B and £2.0B respectively)
  • 06:45 (US) Daily Libor Fixing
  • 07:00 (IN) India announces upcoming bill issuance (held on Wed)
  • 07:00 (MX) Mexico Mar Gross Fixed Investment: -10.5%e v -8.6% prior
  • 07:00 (MX) Mexico May Vehicle Production: No est v 3.7K prior; Vehicle Exports: No est v 27.9K prior
  • 07:00 (BR) Brazil May FGV Inflation IGP-DI M/M: 0.6%e v 0.1% prior; Y/Y: 6.3%e v 6.1% prior
  • 07:30 (IN) India Weekly Forex Reserve w/e May 29th: No est v $487.0B prior
  • 08:00 (PL) Poland May Official Reserves: No est v $118.3B prior
  • 08:00 (CL) Chile May CPI M/M: 0.1%e v 0.0% prior; Y/Y: 2.9%e v 3.4% prior
  • 08:00 (UK) Daily Baltic Dry Bulk Index
  • 08:30 (US) Apr Change in Nonfarm Payrolls: -8.00Me v -20.5M prior; Change in Private Payrolls: -7.25Me v -19.52M prior; Change in Manufacturing Payrolls: -400Ke v -1.33M prior
  • 08:30 (US) May Unemployment Rate: 19.5%e v 14.7% prior; Underemployment Rate: No est v 22.8% prior; Labor Force Participation Rate: 60.0%e v 60.2% prior
  • 08:30 (US) May Average Hourly Earnings M/M: 1.0%e v 4.7% prior; Y/Y: 8.5%e v 7.9% prior; Average Weekly Hours: 34.3e v 34.2 prior
  • 08:30 (CA) Canada May Net change in Employment: -500Ke v -1.99M prior; Unemployment Rate: 15.0%e v 13.0% prior; Full Time Employment Change: No est v
  • 1.47M prior; Part Time Employment Change: No est v -521.9K prior; Participation Rate: 59.1%et v 59.8% prior; Hourly Wage Rate Y/Y: 10.5%e v 10.5% prior
  • 09:00 (RU) Russia Apr Official Reserve Assets: $566.0Be v $567.5Be
  • 09:00 (BR) Brazil May Vehicle Production: No est v 1.9K prior; Vehicle Sales: No est v 55.7K prior; Vehicle Exports: No est v 7.2K
  • 10:00 (CA) Canada May Ivey Purchasing Managers Index (Seasonally Adj): No est v 22.8 prior; PMI (unadj): No est v 23.6 prior
  • 10:30 (TR) Turkey May Cash Budget Balance (TRY): No est v -46.2B prior
  • 11:00 (EU) Potential sovereign ratings after European close (Moody’s on Russia and Turkey Sovereign Debt; S&P on Romania Sovereign Debt; Fitch on Sweden Sovereign Debt; Canadian rating agency DBRS on Germany, Denmark and Poland Sovereign Debt
  • 12:00 (RU) Russia May CPI M/M: 0.3%e v 0.8% prior; Y/Y: 3.0%e v 3.1% priro
  • 12:00 (RU) Russia May CPI Core M/M: 0.3% v 0.5% prior; Y/Y: 2.9% v 2.9%e
  • 13:00 (US) Weekly Baker Hughes Rig Count
  • 15:00 (US) Apr Consumer Credit: -$20.0Be v -$12.1B prior
  • 20:00 (CO) Colombia May CPI M/M: 0.1%e v 0.2% prior; Y/Y: 3.3%e v 3.5% prior
  • 20:00 (CO) Colombia May Core CPI M/M: No est v 0.3% prior; Y/Y: No est v 2.7%
  • (MX) Citibanamex Survey of Economists
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