HomeContributorsFundamental AnalysisGlobal Yields Move Lower

Global Yields Move Lower


  • ECB to announce the results of its strategic review but its monetary policy likely to remain ultra-loose for some time.
  • Risk aversion sentiment finding footing as concern over rising coronavirus cases in various countries.


  • China Sec Journal noted that PBoC might cut its RRR during Sept to help the economy, ‘targeted’ RRR cut might be implemented at the end of Q3.
  • China PBOC Deputy Gov Fan stated that PBOC to take more antitrust actions in the payments sector (similar to measures placed on Ant); Worried about stablecoin impact on global.


  • RBA Gov Lowe reiterated forward guidance that it would take to 2024 to reach conditions to adjust rates.


  • ECB Strategy Review said to agree to set a new inflation target of 2% (from “below but close to 2%”) and to allow for some overshoot of the new inflation goal.
  • Bank of France raised its Q2 GDP forecast from 0.5% to 1.0%. Noted that the economy was recovering a little faster than expected.


  • FOMC Jun Minutes noted that indicators of economic activity and employment had strengthened. Participants remarked that the actual rise in inflation was larger than anticipated. A substantial majority of participants judged that the risks to their inflation projections were tilted to the upside because of concerns that supply disruptions and labor shortages might linger for longer. Members generally expected inflation to ease as the effect of these transitory factors dissipated, but several participants remarked that they anticipated that supply chain limitations and input shortages would put upward pressure on prices into next year. Various participants saw taper somewhat earlier than anticipated (Note: Analysts noted afterward that Fed officials kept a patient tone in terms of tightening monetary policy).
  • Fed’s Bostic (FOMC voter, hawk) noted that a premature rate increase would weigh on the economy but moving late could destabilizing the economy and financial system. The goal would be for the balance sheet to become ‘proportionately smaller in relation to the economy once the crisis is past.


  • Weekly API Crude Oil Inventories: -8.0M v -8.2M prior (7th straight weekly draw).

Speakers/Fixed income/FX/Commodities/Erratum


  • Indices [Stoxx600 -1.9% at 4,002, FTSE -1.3% at 7,056, DAX -1.4% at 15,482, CAC-40 -1.9% at 6,407, IBEX-35 -2.2% at 8,661, FTSE MIB -2.0% at 24,785, SMI -1.2% at 11,938, S&P 500 Futures -1.1%].
  • Market Focal Points/Key Themes: European indices open lower across the board and fell deeper in the red as the session wore on; better-performing sectors include financials and industrials; sectors leading to the downside include real estate and energy; Knorr-Bremse assists in acquiring a stake in Hella; Logitech to replace Swatch on SMI; focus on the release of ECB strategy review; no major earnings releases expected in the upcoming US session.


  • Consumer discretionary: B&M European Value Retail BME.UK -3.0% (results), Deliveroo ROO.UK +3.7% (trading update), Entain ENT.UK +1.8% (trading update), Persimmon PSN.UK.
  • 2.7% (results).
  • Consumer staples: Watches of Switzerland WOSG.UK -2.1% (results).
  • Energy: TGS TGS.NO -9.3% (prelim results).
  • Financials: Danske Bank DANSKE.DK +3.3% (raises outlook).
  • Industrials: Hella HLE.DE -2.2% (Knorr Bremse to not invest), Knorr-Bremse KBX.DE +6.1% (won’t take stake in Hella), Komax KOMN.CH +10.6% (guidance), Stellantis STLA.NL -3.3% (investor day).
  • Technology: Betsson BETSB.SE +7.6% (results), TeamViewer TMV.DE -12.9% (results).


  • UK Chancellor of the Exchequer Sunak (Fin Min) stated that govt plans for jobs was working as unemployment had been far lower than feared.
  • Russia Fin Min Siluanov stated that the carbon tax could impact the Russian budget due to falling revenues during the energy transition.
  • Russia Central Bank official Tremasov stated that 2021 GDP growth likely over 4%.
  • Romania PM Orban said to dismiss Fin Min City.
  • Japan PM Suga confirmed the new State of Emergency for the Tokyo area; effective from July 12th thru Aug 22nd.
  • BOJ said to offer zero rate long-term loans as part of its climate scheme.
  • Malaysia Central Bank (BNM) Policy Statement noted that renewed pandemic measures to dampen growth momentum while favorable external demand to increase growth. Headline inflation likely to be closer to the lower end of the forecast range of 2.5-4.0%. Underlying inflation to remain subdued amid continued spare capacity in the economy. The recent spike in inflation seen as transitory; will moderate in near term as low base effect dissipated.
  • China Commerce Ministry (MOFCOM) spokesperson Gao Feng stated that EU-China were making technical preparations for an investment agreement.

Currencies/Fixed Income

  • USD maintained its recent strength against the European majors as the Jun FOMC Minutes suggested tapering of asset purchases might start earlier than expected due to a stronger economic outlook. Dealers did note that Fed officials did keep a patient tone in terms of tightening monetary policy.
  • EUR/USD hovering around the 1.18 level. Dealers eyeing the official release of the ECB’s strategy review but the most important aspect has been already leaked. Strategy Review said to agree to set new inflation target of 2% (from “below but close to 2%”) and to allow for some overshoot of the new inflation goal. Dealers believe that ECB’s monetary policy likely to remain ultra-loose for some time.
  • USD/JPY was lower on safe-haven flows. Dealers did later suspect the latest state of emergency in Tokyo to counter a rising wave of infections would deal a blow to the recovery and boost the chances of a stimulus package.
  • Yield broadly lower globally. China 10-year yield below 3.0%; US 30-year below 1.90% for a 5-month low.

Economic data

  • (SE) Sweden May Maklarstatistik Housing Prices Y/Y: 20% v 20% prior; Apartment Prices Y/Y: 13% v 13% prior.
  • (NL) Netherlands Jun CPI M/M: 0.2% v 0.1% prior; Y/Y: 2.0% v 2.1% prior.
  • (NL) Netherlands Jun CPI EU Harmonized M/M: 0.1% v 0.1% prior; Y/Y: 1.7% v 1.8%e.
  • (CH) Swiss Jun Unemployment Rate: 2.8% v 2.9%e; Unemployment Rate (seasonally adj): 3.1% v 2.9%e.
  • (DE) Germany May Current Account Balance: €13.1B v €21.0B prior; Trade Balance: €12.3B v €15.1Be; Exports M/M: 0.3% v 0.6%e; Imports M/M: 3.4% v 0.4%e.
  • (FI) Finland May Preliminary Trade Balance: -€0.2B v -€0.3B prior.
  • (RO) Romania Q1 Final GDP (3rd reading) Q/Q: 2.9% v 2.8% prelim; Y/Y: -0.2% v -0.2%e.
  • (MY) Malaysia Central Bank (BNM) left the Overnight Policy Rate unchanged at 1.75% (as expected).
  • (CZ) Czech May Retail Sales Y/Y: 16.5% v 15.7%e; Retail Sales (ex-auto) Y/Y: 8.1% v 3.0%e.
  • (HU) Hungary Jun CPI M/M: 0.6% v 0.2%e; Y/Y: 5.3% v 4.9%e (3rd month with annual pace above target range).

Fixed income Issuance

  • None seen.

Looking Ahead

  • (PL) Poland Central Bank (NBP) Interest Rate Decision: Expected to leave Base Rate unchanged at 0.10%.
  • (IE) Ireland Debt Agency (NTMA) to sell €1.0-1.5B in 2026, 2031 and 2035 IGB bonds.
  • (CO) Colombia Jun Consumer Confidence Index: -26.1e v -34.3 prior.
  • 05:25 (EU) Daily ECB Liquidity Stats.
  • 05:30 (HU) Hungary Debt Agency (AKK) to sell debt.
  • 06:00 (IE) Ireland Jun CPI M/M: No est v 0.1% prior; Y/Y: No est v 1.7% prior.
  • 06:00 (IE) Ireland Jun CPI EU Harmonized M/M: No est v 0.2% prior; Y/Y: No est v 1.9% prior.
  • 06:45 (US) Daily Libor Fixing.
  • 07:00 (MX) Mexico Jun CPI M/M: 0.5%e v 0.2% prior; Y/Y: 5.9%e v 5.9% prior; CPI Core M/M: 0.6%e v 0.5% prior.
  • 07:30 (EU) ECB account of Jun 10th Meeting (Minutes).
  • 08:00 (CL) Chile Jun CPI M/M: 0.3%e v 0.3% prior; Y/Y: 4.1%e v 3.6% prior.
  • 08:00 (BR) Brazil Jun IBGE Inflation IPCA M/M: 0.6%e v 0.8% prior; Y/Y: 8.4%e v 8.1% prior.
  • 08:00 (UK) Daily Baltic Dry Bulk Index.
  • 08:30 (US) Initial Jobless Claims: 350Ke v 364K prior; Continuing Claims: 3.35Me v 3.469M prior.
  • 09:00 (RU) Russia Gold and Forex Reserve w/e July 2nd: No est v $592.4B prior.
  • 10:00 (MX) Mexico Central Bank (Banxico) Jun Minutes.
  • 10:00 (PL) Poland Central Bank Gov Glapinski post rate decision press conference.
  • 10:30 (US) Weekly EIA Natural Gas Inventories.
  • 11:00 (US) Weekly DOE Oil Inventories.
  • 11:30 (US) Treasury to sell 4-Week and 8-Week Bills.
  • 12:00 (CA) Canada to sell 3-year notes.
  • 15:00 (US) May Consumer Credit: $18.0Be v $18.6B prior.
  • 18:00 (NZ) New Zealand Jun Heavy Truckometer M/M: No est v -4.8% prior.
  • 19:00 (PE) Peru Central Bank (BCRP) Interest Rate Decision: Expected to leave Reference Rate unchanged at 0.25%.
  • 19:50 (JP) Japan Jun M2 Money Supply Y/Y: 6.0%e v 7.9% prior; M3 Money Supply Y/Y: 5.2%e v 6.9% prior.
  • 21:00 (PH) Philippines May Trade Balance: -$2.6Be v -$2.7B prior; Exports Y/Y: 33.6%e v 72.1% prior; Imports Y/Y: 49.0%e v 140.9% prior.
  • 21:30 (CN) China Jun CPI Y/Y: 1.3%e v 1.3% prior; PPI Y/Y: 8.8%e v 9.0% prior.
  • 23:00 (CN) China to sell 30-year upsize Bond.
  • 23:30 (JP) Japan to sell 3-Month Bills.
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