Mon, May 23, 2022 @ 00:04 GMT

Holiday Mode Continues

Notes/Observations

  • Markets remain in holiday mode as subdued trading continued.

Asia

  • China PBOC Open Market Operation (OMO) injects CNY200B in 7-day reverse repos with a net injection of CNY190B.
  • China Q4 Beige Book showed companies cut investment and remained cautious on borrowing.

Europe

  • EU Economic Commissioner Gentiloni (Italy) said to intend to propose a modification of the EU Stability Pact in.
  • Spain parliament approves record 2022 budget; Minimum 15% corporate tax clears final hurdle 2022.
  • Italian government’s budget bill with confidence motion attached to face vote in Lower House (Note: Senate adopted the 2022 budget back on Dec 25th).

Energy

  • Weekly API Crude Oil Inventories: -3.1M v -3.7M prior.
  • Russia Gazprom [GAZP.RU] again had not booked gas transit capacity for exports via the Yamal-Europe pipeline for Dec 29th (9th day in a row).

Speakers/Fixed income/FX/Commodities/Erratum

Equities

  • Indices [Stoxx600 +0.22% at 489,58, FTSE +1.10% at 7,453.10, DAX -0.13% at 15,942.15, CAC-40 +0.07% at 7,186.21, IBEX-35 -0.27% at 8,665.11, FTSE MIB -0.14% at 27,406.00, SMI -0.16% at 12,949.85, S&P 500 Futures +0.23%].
  • Market Focal Points/Key Themes: European indices open with a modest bias to the downside, but later trended slowly higher towards a record high; light trading despite all bourses open in Europe; sectors leading to the upside include consumer discretionary and materials; while laggards include financials and industrials; Lukoil and |Gazprom confirm JV on gas exploration; no major earnings expected during the upcoming US session.

Equities

  • Consumer discretionary: RWS Holdings [RWS.UK] +2% (CFO resigns).
  • Materials: Anglo American plc [AAL.UK] +1% (talks with Vale).

Speakers

  • Turkey Central Bank Annual Account: noted that Inflation targeting to continue in 2022 and would maintain the 1-Week Repo Rate as its main policy tool. To maintain medium inflation target at 5.0% and the floating exchange rate regime to continue.
  • Poland Central Bank Gatnar saw the potential for 75bps rate hike at the Jan 4th MPC meeting. Weak PLN currency (Zloty) might lead to a larger hike in the Base Rate.

Currencies/Fixed Income

  • USD drifted higher against the major pairs in quiet trading. USD/JPY tested the 115 area for a 1-month high with dealers eyeing key resistance at 115.25.
  • EUR/USD back below the 1.13 level and stuck within the recent quarterly range.
  • TRY currency (Lira) gave back so more of its recent strength amid renewed demand for USD. Lira weakness despite the CBRT continued to take steps to support the currency. TRY currency unable to capitalize on its rising 10-year govt bond yield as its climbed to a record high near 24.75% area.

Economic data

  • (RU) Russia Dec PMI Manufacturing: 51.6 v 51.5e (3rd straight expansion).
  • (EU) Euro Zone Nov M3 Money Supply Y/Y: 7.3% v 7.6%e.
  • (CH) Swiss Dec Expectations Survey: 0.0 (flat) v -10.8 prior.
  • (AT) Austria Dec Manufacturing PMI: 58.7 v 58.1 prior (18th straight expansion).

Fixed income Issuance

  • (IN) India sold total INR200B vs. INR200B indicated in 3-month, 6-month and 12-month bills.
  • (DK) Denmark sold total DKK in 3-month, 6-month, 9-month and 12-month Bills.

Looking ahead

  • 05:25 (EU) Daily ECB Liquidity Stats.
  • 05:30 (GR) Greece Debt Agency (PDMA) to sell 26-week Bills; Avg Yield: % v -0.43% prior; Bid to cover: x v 2.07x prior (Dec 1st 2021).
  • 06:00 (BR) Brazil Dec FGV Inflation IGPM M/M: 0.7%e v 0.0% prior; Y/Y: 17.6%e v 17.9% prior.
  • 06:00 (PT) Portugal Nov Retail Sales M/M: No est v 2.3% prior; Y/Y: No est v 3.4% prior.
  • 06:45 (US) Daily Libor Fixing.
  • 07:00 (US) no MBA Mortgage Applications data scheduled (**Note: 2-weeks’ worth of data to be released on Wed, Jan 5th).
  • 08:00 (UK) No Daily Baltic Dry Bulk Index this week.
  • 08:30 (US) Nov Preliminary Wholesale Inventories M/M: 1.5%e v 2.3% prior; Retail Inventories M/M: 0.5%e v 0.1% prior.
  • 08:30 (US) Nov Advance Goods Trade Balance: -$88.1Be v -$82.9B prior.
  • 10:00 (US) Nov Pending Home Sales M/M: 0.8%e v 7.5% prior; Y/Y: No est v -4.7% prior.
  • 10:30 (US) Weekly DOE Oil Inventories.
  • 11:00 (RU) Russia Q3 Final GDP (3rd reading) Y/Y: 4.4%e v 4.3% prelim.
  • 11:00 (RU) Russia Nov Unemployment Rate: 4.3%e v 4.3% prior.
  • 11:00 (RU) Russia Nov Real Retail Sales Y/Y: 4.3%e v 4.1% prior.
  • 11:00 (RU) Russia Oct Real Wages Y/Y: 1.4%e v 2.0% prior.
  • 11:00 (RU) Russia Dec Preliminary CPI M/M: 0.7%e v 1.0% prior; Y/Y: 8.3%e v 8.4% prior.
  • 12:30 (BR) Brazil Nov Central Govt Budget Balance (BRL): 1.3Be v 28.2B prior.
  • 13:00 (US) Treasury to sell 2-Year FRN Reopening.
  • 13:00 (US) Treasury to sell 7-Year Notes.
  • 18:00 (KR) South Korea Nov Industrial Production M/M: +2.5%e v -3.0% prior; Y/Y: 3.4%e v 4.5% prior.

 

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