HomeContributorsFundamental AnalysisConcerns Linger That EU Officials Would Not Likely Quickly Agree On Key...

Concerns Linger That EU Officials Would Not Likely Quickly Agree On Key Issues Of Recovery Fund

Notes/Observations

  • Focus on UK Chancellor of the Exchequer Sunak budget speech which is expected to include fresh measures to kick-start the coronavirus-stricken economy with a wide-ranging package of tax cuts
  • Concerns linger that EU officials would not likely quickly agree on key issues of Recovery Fund or 7-year budget at upcoming meetings

Asia:

  • Japan May Current Account (BoP): ÂĄ1.18T v -ÂĄ639Be; Trade Balance (BoP): -ÂĄ556.8B v ÂĄ966.5B prior
  • Australia Treasurer Frydenberg stated that govt to announce more income support beyond Sept with details to come on July 23rd (Thursday)

Coronavirus:

  • Total global cases 11,799,443 (+1.8% d/d); total deaths: 543.6K (+1.1% d/d)

Europe:

  • PM Johnson spoke with German Chancellor Merkel and reiterated stance that Britain was prepared to leave the EU on same trading terms as Australia if a trade deal with the single bloc could not be agreed
  • Chancellor Sunak budget speech on Wed expected to raise stamp duty threshold to ÂŁ500K with the temporary measure seen for a period between 6-12 months
  • Italy PM Conte said to urge that EU must act decisively to build a common response to the economic crisis caused by the COVID-19 pandemic. EU support measures must be activated rapidly. Italy won’t accept a weak compromise; response has to be a strong, ambitious political response

Americas:

  • US President Trump aides reported to propose ideas on undermining USD/HKD peg, the HKD peg idea was raised in talks held by advisers to US Sec of State Pompeo; some officials were however concerned that such a move could hurt HK and US banks
  • Brazil President Bolsonaro tests positive for Coronavirus

Energy:

  • Weekly API Crude Oil Inventories: +2M v -8.2M prior

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

  • Indices [Stoxx600 -0.51% at 367.08, FTSE -0.16% at 6,180.25, DAX -0.26% at 12,584.20, CAC-40 -0.67% at 5,010.12, IBEX-35 -1.40% at 7,343.00, FTSE MIB -0.22% at 19,969.50, SMI -0.37% at 10,170.09, S&P 500 Futures -0.01%]
  • Market Focal Points/Key Themes: European indices open lower across the board but later traded mixed; better performing sectors include telecom and health care; underperforming sectors lead by financials; Boohoo trading lower following launch of supply chain review; Worldline and Ingenico reach agreement on combination terms; focus on economic measures to be proposed by UK Chancellor; earnings expected in the upcoming US session include Bed Bath & Beyond and Marathon Oil

Equities

  • Consumer discretionary:Kindred [KIND.SE] +7% (trading update), FirstGroup [FGP.UK] -16% (earnings), boohoo.com [BOO.UK] -9% (launches Independent review of UK supply chain)
  • Financials: Funding Circle [FCH.UK] +14% (update on govt schemes)
  • Healthcare: Kiadis Pharma [KDS.NL] +52% (agreement with Sanofi)

Speakers

  • ECB’s Lagarde stated that the central bank had time to access situation. Believed ECB actions have been effective
  • ECB’s De Guindos (Spain): Recent data suggests optimism on the growth front
  • France PM Castex: Must preserve the economy if a 2nd lockdown occurs
  • Hungary PM Orban reiterated stance that EU was not likely to quickly agree on key issues of Recovery Fund or 7-year budget
  • Italy think tank Prometeia cuts Italy 2020 GDP forecast from -6.5% to -10.1%
  • South Korea President Moon to announce ‘new deal’ on Monday, July 13th
  • China said to restrict visas for US officials over Tibet
  • Libya National Oil Corp (NOC) said to be prepared to lift the force majeure at ES Sider port

Currencies/Fixed Income

  • FX price action was listless in dull trading in session. Dealers continued to debate any impact of prolong spread of the virus and the possibility it could derail the recovery – EUR/USD saw its slight gains dissipate on speculation that EU officials would not likely to agree on key issues of Recovery Fund or 7-year budget quickly. Pair little changed at 1.1275 at mid-session
  • GBP/USD slightly lower by 0.2% at 1.2525 with dealers focusing on UK Chancellor of the Exchequer Sunak budget speech later today and possibility of fresh measures to kick-start the coronavirus-stricken economy with a wide-ranging package of tax cuts

Economic Data

  • (SE) Sweden Maklarstatistik May Housing Prices Y/Y 5% v 5% prior; Apartment Prices Y/Y: 2% v 3% prior
  • (CH) Swiss Jun Unemployment Rate: 3.2% v 3.4%e; Unemployment Rate (Seasonally Adj): 3.3% v 3.6%e
  • (NO) Norway May Overall GDP M/M: +1.9% v -3.8% prior; Mainland GDP M/M 2.4% v 4.3%e
  • (CZ) Czech May Retail Sales Y/Y: -12.2% v -14.4%e; Retail Sales (ex-auto) Y/Y: -0.7% v -6.4%e
  • (HU) Hungary Jun CPI M/M: 0.4% v 0.7%e; Y/Y: 2.9% v 2.9%e
  • (HU) Hungary Jun YTD Budget Balance (HUF): -1.837T v -1.052T prior

Fixed Income Issuance

  • (FR) French Debt Agency (AFT) opened its book to sell EUR-denominated Mar 2036 inflation-linked bonds (Oatei) via syndicate; guidance seen 20bps over benchmark
  • (IN) India sold total INR450B vs. INR450B indicated in 3-month, 6-month and 12-month bills
  • (DK) Denmark sold total DKK4.92B in 3-month, 6-month, 9-month and 12-month bills
  • (SE) Sweden sold total SEK15.0B vs. SEK15.0B indicated in 3-month 6-month bills
  • (CH) Switzerland sold total CHF395.4B in 2030 and 2039 Bonds

Looking Ahead

  • 05:30 (DE) Germany to sell €5.0B in new 0.00% Oct 2025 BOBL
  • 05:30 (GR) Greece Debt Agency (PDMA) to sell 13-week Bills
  • 05:30 (HU) Hungary Debt Agency (AKK) to sell 12-month bills
  • 05:30 (ZA) South Africa announces details of next bond auction (held on Tuesdays)
  • 06:00 (RU) Russia to sell Mar 2026 OFZ bonds
  • 06:00 (CZ) Czech Republic to sell combined CZK5.0B in 2027 and 2031 bonds
  • To sell CZK3.0B in 2027 Floating Bonds
  • To sell CZK2.0B in 1.2% 2031
  • 06:45 (US) Daily Libor Fixing
  • 07:00 (US) MBA Mortgage Applications w/e July 3rd: No est v -1.8% prior
  • 07:00 (BR) Brazil Jun FGV Inflation IGP-DI M/M: 1.5%e v 1.1% prior; Y/Y: 7.7%e v 6.8% prior
  • 07:00 (UK) Weekly PM Question time in House
  • 07:30 (UK) Chancellor of the Exchequer Sunak (Fin Min) Budget Speech
  • 07:45 (UK) BOE to buy ÂŁ1.15B in APF Gilt purchase operation (3-7 years)
  • 08:00 (HU) Hungary Central Bank Jun Minutes
  • 08:00 (CL) Chile Jun CPI M/M: 0.0%e v -0.1% prior; Y/Y: 2.7%e v 2.8% prior
  • 08:00 (BR) Brazil May Retail Sales M/M: +5.9%e v -16.8% prior; Y/Y: -13.2%e v -16.8% prior
  • 08:00 (BR) Brazil May Broad Retail Sales M/M: +6.7%e v -17.5% prior; Y/Y: -22.5%e v -27.1% prior
  • 08:00 (BR) CONAB Crop Report
  • 08:00 (UK) Daily Baltic Dry Bulk Index
  • 08:45 (UK) BOE to buy ÂŁ1.15B in APF Gilt purchase operation (7-20 years)
  • 09:00 (EU) Weekly ECB Forex Reserves
  • 09:45 (UK) BOE to buy ÂŁ1.15B in APF Gilt purchase operation (20+ years)
  • 10:00 (ES) ECB’s De Guindos (Spain)
  • 10:30 (US) Weekly DOE Oil Inventories
  • 12:00 (RU) Russia Jun CPI M/M: 0.3%e v 0.3% prior; Y/Y: 3.2%e v 3.0% prior
  • 12:00 (RU) Russia Jun CPI Core M/M: 0.2%e v 0.3% prior; Y/Y: 3.0%e v 2.9% prior
  • 12:00 (CA) Canada to sell 3 Year Bonds
  • 12:15 (US) Fed’s Bostic participates in webinar on economy
  • 13:00 (US) Treasury to sell $29B in 10-Year Notes Reopening
  • 15:00 (US) May Consumer Credit: -$15.0Be v -$68.8B prior
  • 18:00 (NZ) New Zealand Jun Heavy Truckometer Index M/M: No est v 86.9% prior
  • 19:01 (UK) Jun RICS House Price Balance: -25%e v -32% prior
  • 19:50 (JP) Japan Jun M2 Money Stock Y/Y: 5.7%e v 5.1% prior; M3 Money Stock Y/Y: 4.4%e v 4.1% prior
  • 19:50 (JP) Japan May Core Machine Orders M/M: -5.0%e v -12.0% prior; Y/Y: -16.8%e v -17.7% prior
  • 21:00 (NZ) New Zealand July Preliminary Business Confidence: No est v -34.4 prior
  • 21:30 (CN) China Jun CPI Y/Y: 2.5%e v 2.4% prior; PPI Y/Y: -3.2%e v -3.7% prior
  • 22:00 (SL) Sri Lanka Central Bank (CBSL) Interest Rate Decision: Standing Deposit Rate; Standing Lending Rate
  • 22:05 (NZ) New Zealand to sell 2023, 2029 and 2033 bonds
  • 23:00 (CN) China to sell 10-year Upsized Special Government Bond
  • 23:30 (JP) Japan to sell 6-Month Bills – 23:35 (JP) Japan to sell 5-Year Bonds
Trade The News
Trade The Newshttp://www.tradethenews.com/
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.

Featured Analysis

Learn Forex Trading