Notes/Observations
- German Industrial Production missed expectations and registered its sharpest drop on record; decline expected to continue over the coming three months
- Optimism remains on a global recovery remain on front burner; China May retail auto sales rise for 1st time in almost a year
Asia:
- China May Trade Balance registered a record high surplus) ( $62.9B v $40.0Be) as Imports recorded its largest decline since Jan 2016 (Y/Y: -16.7% v -7.8%e)
- China May Foreign Reserves: $3.102T v $3.095T
- China Vice Foreign Min stated that it would suspend debt repayments from 77 developing countries; China had fulfilled its responsibility as a big country through shipments of coronavirus pandemic goods to other countries; Relationship with most countries had improved since coronavirus outbreak
- Japan Q1 Final GDP revised slightly higher and confirmed the country was in a technical recession (QoQ: -0.6% v -0.5%e; GDP Annualized QoQ: -2.2% v -2.1%e(
Coronavirus:
- Total Global total cases 7,009,065; total deaths: 402.7K
Europe:
- German Parliament members said to seek way to resolve Constitutional Court ruling on Bundesbank. Proposal said to seek a statement of clarification from the European Parliament, rather than the ECB.
- Canadian rating agency DBRS affirms Germany sovereign rating AAA, stable rating
Americas:
- US President Trump said to have ordered troop reduction in Germany by September. Would reduce US presence in Germany by 9,500 troops out of the current 34,500 troops permanently assigned there
- President Trump: To hold Law Enforcement roundtable on Monday, June 8th (15:00 ET/19:00 GMT)
Mid-East/Energy:
- OPEC+ members agreed to one month extension of 9.7M bpd oil production cuts; to review market later in June for a possible further extension
- Russia Energy Min Novak: Russia will fully comply with the OPEC+ deal in June; see Russia’s 2020 oil production seen between 510-520M tonnes (Note: 2019 level was 561M tons)
SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM
Equities
- Indices [Stoxx600 -0.14% at 374.80, FTSE +0.31% at 6,504.20, DAX -0.16% at 12,827.32, CAC-40 -0.16% at 5,189.68, IBEX-35 +1.15% at 7,963.00, FTSE MIB +0.83% at 20,355.50, SMI -0.16% at 10,173.74, S&P 500 Futures +0.51%]
- Market Focal Points/Key Themes: European indices open generally lower but turned to mixed as the session progressed; best performing sectors lead by energy and financials; underperformers lead by technology sector; over 500 travel and hospitality companies suing UK government over quarantine; French LabMin says domestic economy activity at 80%; Wirecard shares impacted from German prosecutors announcing investigation on Friday; AstraZeneca reportedly made initial approach to Gilead, but later withdrew proposal; no major earnings expected in upcoming US session
Equities
- Consumer discretionary: Marston’s [MARS.UK] +11% (UK opening restaurants)
- Healthcare: Astrazeneca [AZN.UK] -3% (potential merger with Gilead), Oxford BioMedica [OXB.UK] +6% (collaboration)
- Technology: Wirecard [WDI.DE] -2.5% (updates on KPMG report)
Speakers
- Germany Cabinet to meet on Fri, Jun 12th the discuss implementation of its €130B stimulus package
- Sweden Interior Min Damberg: To propose steps to halt the takeover of critical assets at a time of economic weakness due to the Covid-19 pandemic
- Japan Fin Min Aso stated that he did need believe it had to rethink the FY25 primary balance at this time
- China Foreign Ministry spokesperson Zhao Lijian reiterated view that India border situation is stable. Agreed to avoid conflict and manage differences with India. China want to work with Australia for a favorable trade environment. US should promise (like China) to make its Covid-19 vaccine a global public good when there is one
Currencies/Fixed Income
- USD continued to maintain a soft tome as market participant continued to price in a rapid recover in global markets. Dealers cited the sharp surge in the May US payroll data released last week. Also China retail car sales rising in May for the 1st time in almost a year
Economic Data
- (SE) Sweden SEB Housing-Price Indicator: -23 v -26 prior
- (DE) Germany Apr Industrial Production M/M: -17.9% v -16.5%e; Y/Y: -25.3% v -24.8%e
- (DK) Denmark Apr Industrial Production M/M: -4.5% v -0.4% prior
- (FI) Finland Apr Preliminary Trade Balance: +€0.2B v -€0.3B prior
- (CZ) Czech Apr Trade Balance (CZK): -26.9B v +0.5Be
- (CZ) Czech Apr Industrial Output Y/Y: -33.7% v -25.0%e; Construction Output Y/Y: -4.6% v -0.3% prior
- (SE) Sweden Q1 Current Account Balance (SEK): 80.6B v 43.2B prior
- (CH) Swiss Weekly Total Sight Deposits (CHF): 680.3B v 681.6B prior (1st decline since Mid-Jan); Domestic Sight Deposits: 594.5B v 597.9B prior
- (TW) Taiwan May Trade Balance: $4.7B v $2.6Be; Exports Y/Y: -2.0% v -3.5%e; Imports Y/Y: -3.5% v +2.1%e
- (EU) Euro Zone Jun Sentix Investor Confidence: -24.8 v -22.0e
- (HU) Hungary May YTD Budget Balance (HUF): -1,052T v -727.4B prior
- (SG) Singapore May Foreign Reserves: $301.0B v $301.8B prior
Fixed Income Issuance
- (NO) Norway sold NOK2.0B vs. NOK2.0B indicated in 3-month Bills; Avg Yield: 0.08% v 0.05% prior; Bid-to-cover: 2.15x v 2.69x prior
Looking Ahead
- 05:30 (DE) Germany to sell €8.0B in 3-month and 9-month Bubills
- 05:30 (NL) Netherlands Debt Agency (DSTA) to sell combined 6.5B in 3-month, 9-month and 12-month Bills
- 05:30 (ZA) South Africa announces details of upcoming I/L bond sale (held on Fridays)
- 06:00 (IE) Ireland Apr Industrial Production M/M: No est v 15.6% prior; Y/Y: No est v 22.9% prior
- 06:00 (IL) Israel to sell 2020, 2022, 2030, 2037 and 2045 Bonds
- 06:45 (US) Daily Libor Fixing
- 07:00 (IN) India announces details of upcoming bond sale (held on Fridays)
- 07:25 (BR) Brazil Central Bank Weekly Economists Survey
- 08:00 (UK) Daily Baltic Dry Bulk Index
- 08:00 (ES) Spain Debt Agency (Tesoro) announces size for upcoming bill auction
- 08:15 (CA) Canada May Annualized Housing Starts: 160.0Ke v 171.3K prior
- 08:30 (CL) Chile May Trade Balance: $1.5Be v $1.2B prior; Total Exports: No est v $5.4B prior; Total Imports: No est v $4.1B prior; Copper Exports: No est v $2.4B prior
- 08:30 (CL) Chile May International Reserves: No est v $36.9B prior
- 08:50 (FR) France Debt Agency (AFT) to sell €7.1-8.7B in 3-month, 6-month and 12-month bills (4 tranches)
- 09:45 (EU) ECB weekly QE bond buying update
- 09:45 (EU) ECB’s Lagarde in European Parliament Hearing
- 11:30 (US) Treasury to sell 13-week and 26-week Bills
- 13:00 (US) Treasury to sell 3-Year Notes
- 16:00 (US) Weekly Crop Report
- 18:00 (NZ) New Zealand May Heavy Truckometer Index M/M: No est v -45.0% prior
- 19:01 (UK) May BRC Sales Like-For-Like Y/Y: No est v 5.7% prior
- 19:30 (JP) Japan Apr Labor Cash Earnings Y/Y: -1.0%e v +0.1% prior; Real Cash Earnings Y/Y: -1.1%e v -0.3% prior
- 19:50 (JP) Japan May M2 Money Stock Y/Y: 4.0%e v 3.7% prior; M3 Money Stock Y/Y: 3.1%e v 3.0% prior
- 20:30 (AU) Australia to sell 2024 and 2035 Bond
- 21:00 (NZ) New Zealand Jun Preliminary Activity Outlook: No est v -38.7 prior
- 21:30 (AU) Australia May Business Confidence: No est v -46 prior; Business Conditions: No est v -34 prior
- 23:00 (TH) Thailand Central Bank to sell 3-month and 6-month bills
- 23:30 (HK) Hong Kong to sell 3-month, 6-month and 12-month bills
- 23:35 (JP) Japan to sell 6-month bill
