Notes/Observations
- Global Indices fall as the Trump administration moves ahead with plans to impose a further $200B in tariffs on China
- Fox increases bid for UK broadcaster Sky in battle with Comcast
Asia:
- Asian Indices traded sharply lower as the US announced proposed additional $200B in tariffs on Chinese goods, China reiterates it will take counter actions
- China Mofcom responded by saying it cannot accept the proposed tariff, noting it would harm China, the World and itself
- Japan May Machinery order beats forecasts falling less than expected
Europe:
- European Indices trade sharply lower across the board, Burberry, Microfocus, Indivior, Deutz among the worst performers.
- Fox raises bid for Sky to £14.00 share as it continues its bidding war with Comcast
Economic Data:
- (SE) Sweden May PES Unemployment Rate: 3.7% v 3.5% prior
- (RO) Romania June CPI M/M: 0.0% v 0.5% prior; Y/Y: 5.4% v 5.4% prior
- (MY) MALAYSIA CENTRAL BANK (BNM) LEAVES OVERNIGHT POLICY RATE UNCHANGED AT 3.25%; AS EXPECTED
- (CZ) Czech June CPI M/M: 0.4% v 0.3%e; Y/Y: 2.6% v 2.5%e
- (CN) China Jun auto sales at 1.87M, +2.3% y/y CAAM
Fixed Income Issuance:
- Italy Debt Agency (Tesoro) sells €6.0B vs. €6.0B indicated in 12-month Bills; Avg Yield: 0.337% v 0.55% prior; Bid-to-cover: 2.01x v 1.95x prior
SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM
Equities
- Indices [Stoxx50 -1.1% at 3,437, FTSE -1.3% at 7,589, DAX -1.2% at 12,454, CAC-40 -1.0% at 5,377; IBEX-35 -1.1% at 9,782, FTSE MIB -1.5% at 21,727, SMI -1.1% at 8,670, S&P 500 Futures -0.8%]
- Market Focal Points/Key Themes: European indices opened lower across the board; trade concerns back in focus, impacting risk sentiment; focus on NATO meeting in Brussels; materials components most impacted; consumer discretionary supported; Sky receives raised offer from Fox; Burberry reported results, dragging on luxury stocks; earnings expected in the upcoming US session include MSC Direct, Fastenal and AngioDynamics
Equitie
- Consumer discretionary: Beneteau BEN.FR -13.7% (results), Beter Bed BBED.NL +8.4% (analyst action), Burberry BRBY.UK +1.2% (results), Lagardere MMB.FR +1.3% (analyst action), SKY SKY.UK -1.1% (Fox raised offer)
- Energy: Fred Olsen FOE.NO -9.5% (results), OMV OMV.AT -3.3%(production update), Spie SPIE.FR +2.0%(analyst action)
- Industrials: CNH Industrial CNHI.IT -3.7% (analyst action), Deutz DEZ.DE -4.7% (results), Jenoptik JEN.DE -2.8% (acquisition, outlook)
- Healthcare: Indivior INDV.UK -32.4%(outlook), Idorsia IDIA.CH -5.5% (share issue)
- Materials: Eramet ERA.FR -6.1% (extends MDL takeover period)
Speakers
- (US) President Trump: Germany is totally controlled by Russia; NATO deal is unfair to us; Because of me NATO has been raising money
- (CN) China Foreign Ministry spokesperson Hua Chunying: Reiterates it will take counter measures; says its war between strong power and rules
Currencies
- The Japanese yen rallied on trade-war concerns
- Yuan leads currency drop as Trump raises trade heat, offshore Yuan extending drop to as much as 0.74% at 6.6997 against the dollar.
Fixed Income
- (IT) Italy Debt Agency (Tesoro) sells €6.0B vs. €6.0B indicated in 12-month Bills; Avg Yield: 0.337% v 0.55% prior; Bid-to-cover: 2.01x v 1.95x prior
- Bund Futures trade 36 ticks higher at 162.74 following the move in Treasuries. Upside targets 163.25 followed by 163.85, while a return lower targets the 159.75 level.
- Gilt futures trade at 123.11 higher by 26 ticks as UK cabinet exits weigh on sterling. Support continues stands at 121.75 then 120.25, with upside resistance at 123.85 then 124.25.
- Wednesday’s liquidity report showed Tuesday’s excess liquidity fell from €1.878T to €1.868T. Use of the marginal lending facility rose from €26M to €31M.
- Corporate issuance saw no issuance
Looking Ahead
- 06:00 (PT) Portugal Jun Final CPI M/M: No est v 0.1% prelim; Y/Y: No est v 1.6% prelim, CPI EU Harmonized M/M: No est v 0.1% prelim; Y/Y: No est v 2.0% prelim
- 07:00 (US) MBA Mortgage Applications w/e July 6th: No est v % prior
- 07:00 (BR) Brazil July IGP-M Inflation (1st Preview): No est 1.5% prior
- 08:00 (RO) Romania Central Bank (NBR) Jun Minutes
- 08:05 (UK) Baltic Dry Bulk Index
- 08:30 (US) Jun PPI Final Demand M/M: 0.2%e v 0.5% prior; Y/Y: No est v 3.1% prior, PPI Ex Food and Energy M/M: 0.2%e v 0.3% prior; Y/Y: No est v 2.4% prior, PPI Ex Food, Energy, Trade M/M: No est v 0.1% prior; Y/Y: No est v 2.6% prior
- 10:00 (CA) Bank of Canada (BOC) Interest Rate Decision: Expected to raise Interest Rates by 25bps to 1.50%
- 10:00 (US) May Final Wholesale Inventories M/M: No est v 0.5% prelim, Wholesale Trade Sales M/M: No est v 0.8% prior
- 10:30 (US) Weekly DOE Crude Oil Inventories
