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Focus On BoE And Turkish Rate Decisions, Corporate Earning Season Picks Up The Pace


  • German Factory Orders beat expectations suggesting industry was coping very well with the virus restrictions.
  • Norges keeps outlook for 1st potential rate hike in 2nd half of 2021.


  • Japan and Shanghai returned from extended holidays.
  • China National Development and Reform Commission (NDRC) announced that it indefinitely halting all activities under the China-Australia Strategic Economic Dialogue.
  • BOJ March Minutes (two meetings ago): Members agreed YCC was exerting intended policy effect. Members agreed that there was extremely high uncertainty on developments over the pandemic and their impact on the economic and price outlook.
  • RBNZ Deputy Gov Bascand reiterated stance that rates would need to stay low for quite a long time, thought inflation spike was temporary.
  • G7 Foreign Min communique expressed ‘deep concerned’ about human rights violations in Xinjiang and Tibet. Remain seriously concerned about the situation in and around the East and South China Seas; Regarding Taiwan the G7 reiterated strong opposition to any unilateral actions that could escalate tensions or undermine regional stability.


  • US Trade Rep Tai: US supported a waiver of vaccine patent protections at the WTO.
  • Tokyo Gov Koike stated that was not in situation to lift state of emergency in Tokyo and needed an extension needed (Note: Govt was said to be considering extending current SOE until end of May and possibly by another month.


  • Royal Navy ships said to be ordered to Jersey as French fishermen prepare blockade (Note: France govt confirmed its sent a patrol vessel sent to Jersey).


  • Fed Vice Chair Clarida stated that it was still not the time to begin ‘talking about talking about tapering’.
  • Fed’s Mester (FOMC voter): expected inflation to rise this year but unlikely to trigger a rate rise; monetary policy would need to be very accommodative for some time to support broadening of recovery. Labor market gains did not meet requirement for tapering.
  • Brazil Central Bank (BCB) raises Selic Target Rate by another 75bps to 3.50% (as expected) and planned another 75bps hike at its next meeting.

Speakers/Fixed income/FX/Commodities/Erratum


  • Indices [Stoxx600 -0.11% at 441.04, FTSE +0.13% at 7,048.11, DAX +0.22% at 15,203.45, CAC-40 +0.10% at 6,345.77, IBEX-35 -0.11% at 8,958.00, FTSE MIB +0.48% at 24,582.50, SMI -0.12% at 11,096.46, S&P 500 Futures +0.17%].
  • Market Focal Points/Key Themes: European indices open mixed with slight upward bias and failed to gain direction through the session; better-performing sectors include consumer discretionary and health care; while materials and real estate among those underperforming; AB InBev’s results beat, supporting sector; reportedly Italian government backs off single network; UBS sells stake in Clearstream to Deutsche Boerse; focus on upcoming BOE meeting; earnings expected during the forthcoming US session include Blue Apron, Fastenal, Moderna and Morphosys.


  • Consumer discretionary: Next [NXT.UK] +3% (trading update), Aston Martin [AML.UK] +2% (earnings), AB InBev [ABI.BE] +5% (earnings).
  • Financials: Societe Generale [GLE.FR] +4% (earnings), UniCredit [UCG.IT] +3% (earnings), ING [INGA.NL] -2% (earnings).
  • Healthcare: BioNTech [22UA.DE] -17% (US President Biden issuing support for a waiver of vaccine patent protections).
  • Industrials: Volkswagen [VOW3.DE] -1% (earnings), Continental [CON.DE] -1% (earnings).
  • Telecom: Telecom Italia [TLIT.IT] -5% (Italian govt said to drop backing of Telecom Italia single network plan).


  • ECB Economic Bulletin noted that the near-term economic outlook remained clouded by uncertainty about the resurgence of the pandemic and the roll-out of vaccination campaigns. Preserving favorable financing conditions over the pandemic period remained essential.
  • Norway Central Bank (Norges) Olsen post rate decision press conference noted that the economy should gradually normalize but uncertainty remained. Pandemic was not over but vaccinations were well underway and saw light at the end of the tunnel. Normalization of liquidity was well underway and saw all extraordinary loans repaid by end-Aug.
  • RBA’s Debelle commented that the domestic recovery had exceeded expectations but rates to stay low. Reiterated RBA stance that did not see conditions for a rate hike until 2024 and would not raise rates until inflation was sustainably within target. Mindful not to cause market dysfunction with bond purchases. Decision on 3-year YCC bond to take into account economy, financial conditions and other central banks.
  • France Fin Min Le Maire stated that the govt was in no rush to add more funds to support the domestic recovery as the priority remained on disbursing money from current €100B plan.
  • German VDMA Engineering association: Mar Machinery Orders +29% y/y.
  • Malaysia Central Bank Policy Statement reiterated view that remained committed to utilizing policy levers as appropriate. Reiterated stance that current policy was appropriate and accommodative and decisions going forward to be determined by data and new information. Headline inflation to spike briefly in Q2 and saw 2021 Headline CPI between 2.5-4.0% on stronger oil prices.
  • China Foreign Ministry spokesperson Wang Wenbin: G7 Statement interfered with country’s internal affairs. G7 needed to make concrete actions to increase the global recovery rather than disrupt the process.

Currencies/ Fixed Income

  • USD moved away from recent two-week highs as numerous Fed officials continued to suggest there were no plans to reduce monetary stimulus yet despite an improving economy.
  • GBP/USD was holding above the 1.39 level ahead of local and national elections and the Bank of England’s policy decision. Dealers were pondering whether BOE would fuel expectations that its next move might be to tighten monetary rather than provide fresh stimulus to the economy. Dealers pondered whether today’s events could break the $1.38-$1.40 range that cable has been in since mid-April.
  • AUD/USD was lower as a rift with top trade partner China intensified. Pair at 0.7750 by mid-EU session.

Economic data

  • (DE) Germany Mar Factory Orders M/M: 3.0% v 1.5%e; Y/Y: 27.8% v 25.6%e.
  • (UK) Apr Official Reserves Changes: +$1.6B v -$0.4B prior.
  • (RU) Russia Apr PMI Services: 55.2 v 56.0e (4th straight expansion); PMI Composite: 54.0 v 54.6 prior.
  • (NO) Norway Mar Industrial Production M/M: +0.9% v -1.2% prior; Y/Y: 0.6% v 1.5% prior.
  • (NO) Norway Mar Manufacturing Production M/M: +0.7% v -0.4% prior; Y/Y: 4.7% v 0.8% prior.
  • (MY) Malaysia Central Bank (BNM) left the Overnight Policy Rate unchanged at 1.75% (as expected).
  • (AT) Austria Apr Wholesale Price Index M/M: 0.6% v 1.6% prior; Y/Y: 8.7% v 6.9% prior.
  • (CZ) Czech Mar Retail Sales Y/Y: 13.0% v 15.8%e; Retail Sales (ex-auto) Y/Y: 6.6% v 9.2%e.
  • (HU) Hungary Mar Retail Sales Y/Y: -2.0% v -5.3%e.
  • (HU) Hungary Mar Industrial Production M/M: 0.4% v 4.8% prior; Y/Y: 16.2% v 15.2%e.
  • (DE) Germany Apr Construction PMI: 46.2 v 47.5 prior.
  • (NO) Norway Central Bank (Norges) left Deposit Rates unchanged at 0.00% (as expected).
  • (TW) Taiwan Apr CPI Y/Y: 2.1% v 1.9%e; CPI Core Y/Y: 1.4% v 1.2%e; WPI Y/Y: 9.6% v 8.5%e.
  • 04:00 (HU) Hungary Fin Min Varga.
  • (UK) Apr Final Services PMI: 60.0 v 60.1e (confirmed 2nd month of expansion and highest since Oct 2013); Composite PMI: 60.7 v 60.0e.
  • (EU) Euro Zone Mar Retail Sales M/M: 2.7% v 1.6%e; Y/Y: 12.0% v 9.4%e.
  • (IS) Iceland Q1 Unemployment Rate: 7.7% v 7.6% prior.
  • (IS) Iceland Apr Preliminary Trade Balance (ISK): -6.9B v -21.0B prior.

Fixed income Issuance

  • (ES) Spain Debt Agency (Tesoro) sold total €B vs. €4.5-5.5B indicated rangen 2026, 2031 and 2050 Bonds.
  • Sold €1.33B in 0.0% Jan 2026 SPGB bonds; Avg Yield: -0.240% v -0.289% prior; bid-to-cover: 2.08x v 1.64x prior (Apr 8th 2021).
  • Sold €1.94B in 0.10% Apr 2031 SPGB bonds; Avg Yield: 0.433% v 0.368% prior; bid-to-cover: 1.62x v 1.92x prior (Apr 22nd 2021).
  • Sold €1.66B in 1.00% Oct 2050 SPGB Avg Yield: 1.405% v 1.297% prior; bid-to-cover: 1.25x v 1.55x prior.
  • (ES) Spain Debt Agency (Tesoro) sold €509M vs. €250-750M indicated range in 0.70% Nov 2033 inflation-linked bonds (SPGBi); Real Yield: -0.802% v -0.908% prior; Bid-to-cover: 1.58x v 1.61x prior.
  • (FR) France Debt Agency (AFT) sold total €10.355B vs. €10-11.0B indicated range in 2031, 2040 and 2052 Bonds.
  • Sold €6.81B in 0.0% Nov 2031 Oat; Avg Yield: 0.13% v 0.00% prior; Bid-to-cover: 1.73x v 1.65x prior.
  • Sold €1.80B in 0.50% May 2040 Oat; Avg Yield: 0.62% v 0.43% prior; bid-to-cover: 2.51x v 2.30x prior.
  • Sold €1.745B in 0.75% May 2052 Oat; Avg Yield: 0.93% v 0.78% prior; Bid-to-cover: 2.25x v 2.33x prior.

Looking ahead

  • (IL) Israel Apr Foreign Currency Balance: No est v $185.7B prior.
  • 05:20 (EU) Daily ECB Liquidity Stats.
  • 05:30 (HU) Hungary Debt Agency (AKK) to sell bonds.
  • 05:50 (HU) Hungary Central Bank One-Week Deposit Rate Tender.
  • 06:00 (IE) Ireland Apr Unemployment Rate: No est v 5,8% prior.
  • 06:30 (ES) ECB’s De Guindos (Spain).
  • 06:45 (US) Daily Libor Fixing.
  • 07:00 (UK) Bank of England (BOE) Interest Rate Decision: Expected to leave Interest Rates unchanged at 0.1% prior and maintain Total Asset Purchase Target at £895B (Gilt Purchase Target at £875B and Corporate Bond Target at £20B).
  • 07:00 (TR) Turkey Central Bank (CBRT) Interest Rate Decision: Expected to leave One-Week Repo Rate unchanged at 19.00%.
  • 07:00 (ZA) South Africa Mar Electricity Production Y/Y: No est v -4.3% prior; Electricity Consumption Y/Y: No est v -3.8% prior.
  • 07:15 (EU) ECB chief lagarde.
  • 07:30 (US) Apr Challenger Job Cuts: No est v -30.6K prior; Y/Y: No est v -86.2% prior.
  • 08:00 (UK) Daily Baltic Dry Bulk Index.
  • 08:30 (US) Q1 Preliminary Nonfarm Productivity: +4.3%e v -4.2% prior; Unit Labor Costs: -1.0%e v +6.0% prior.
  • 08:30 (US) Initial Jobless Claims: 535Ke v 553K prior; Continuing Claims: 3.62Me v 3.660M prior.
  • 08:30 (CZ) Czech Central Bank (CNB) Interest Rate Decision: Expected to leave 2-Week Repurchase Rate unchanged at 0.25%.
  • 08:30 (US) Weekly USDA Net Export Sales.
  • 09:00 (RU) Russia Gold and Forex Reserve w/e Apr 30th: No est v $583.7B prior.
  • 09:00 (CL) Chile Mar Nominal Wage M/M: No est v -0.3% prior; Y/Y: No est v 4.1% prior.
  • 09:15 (DE) ECB’s Schnabel (Germany).
  • 09:45 (UK) BOE to buy £1.48B in APF Gilt purchase operation (3-7 years).
  • 10:00 (US) Fed’s Kaplan.
  • 10:30 (US) Weekly EIA Natural Gas Inventories.
  • 11:30 (US) Treasury to sell 4-week and 8-week Bills.
  • 13:00 (NO) Norway Central Bank (Norges) Gov Olsen.
  • 13:00 (US) Fed’s Mester.
  • 15:00 (AR) Argentina Mar Industrial Production Y/Y: No est v 1.6% prior; Construction Activity Y/Y: No est v 22.7%prior.
  • 16:00 (US) Fed Financial Stability Report.
  • 18:30 (AU) Australia Apr Performance of Services Index: No est v 58.7 prior.
  • 19:00 (KR) South Korea Mar Current Account Balance: No est v $8.0B prior; Balance of Goods (BOP): No est v $6.1B prior.
  • 19:30 (JP) Japan Mar Labor Cash Earnings Y/Y: -0.2%e v -0.4% prior (revised from -0.2%); Real Cash Earnings Y/Y: 0.0%e v 0.1% prior (revised from 0.2%).
  • 19:50 (JP) Japan End-Apr Monetary Base End: No est v ¥643.6T prior.
  • 21:00 (PH) Philippines Mar Trade Balance: -$2.5Be v -$2.3B prior; Exports Y/Y: +11.5%e v -2.3% prior; Imports Y/Y: 6.6%e v 2.7% prior.
  • 21:30 (AU) RBA Statement on Monetary Policy (SOMP).
  • 21:00 (PH) Philippines Mar Unemployment Rate: No est v 8.8% prior.
  • 21:45 (CN) China Apr Caixin PMI Services: 54.2e v 54.3 prior; PMI Composite: No est v 53.1 prior.
  • 23:00 (ID) Indonesia Apr Foreign Reserves: No est v $137.1B prior.
  • 23:00 (NZ) New Zealand Q2 Inflation Expectations Survey: 2-year Outlook: No est v 1.9% prior.
  • 23:30 (JP) Japan to sell 3-Month Bills.
  • (UK) Scotland Elections.
  • (UK) local elections.


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