Most Of Europe Sidelined With Holiday

Notes/Observations

• World leaders condemn Belarus after Ryanair flight was forced to land and opposition activists arrested.
• China intensified its campaign to cool a raw-materials boom, pledging severe punishment for violations.
• Whit Monday holiday in Europe sees limited participation with Germany, Switzerland markets closed.

Asia:

• China National Development and Reform Commission (NDRC) held talks with major commodity companies; vowed to have ‘zero tolerance for any commodities futures violations.
• South Korea President Moon and US President Biden Joint Statement (Fri) called for full implementation of UN Sanctions on North Korea.

Coronavirus:

• New UK data showed that two C-19 vaccine shots offer good protection against the Indian variant (Note: in-line with recent press reports).
• UK Health Sec Hancock noted that govt was increasingly confident about further easing of the Covid-19 restrictions in June.

Europe:

• ECB De Guindos (Spain) stated that data was improving, but policy must remain very loose.
• SNB President Jordan reiterated stance that SNB could expand balance sheet further If necessary.

Speakers/Fixed income/FX/Commodities/Erratum

Equities

• Indices [Stoxx600 -0.02% at 444.36, FTSE +0.25% at 7,035.45, DAX +0.44% at 15,437.51, CAC-40 +0.09% at 6,392.28, IBEX-35 +0.10% at 9,213.00, FTSE MIB -0.41% at 24,868.50, SMI +0.66% at 11,225.58, S&P 500 Futures +0.41%].
• Market Focal Points/Key Themes: European indices open modestly higher and generally maintained direction as the session progressed; sectors moving into the green include telecom and financials; sectors trending to the downside include materials and utilities; several bourses closed for the holiday, including Austria, Denmark, Germany, Norway, and Switzerland; several Italian firms go ex-dividend, weighing on FTSE MIB; HeidelbergCement sells a unit to Martin Marietta; Bergson Beheer raises offer price for Hunter Douglas; focus on potential commentary from EU leaders at the start of EU Council meeting; no major equities events scheduled for the remainder of the session.

Equities

• Consumer discretionary: Ryanair [RYA.UK] -1% (forced landing in Belarus).
• Industrials: Hunter Douglas [HDG.NL] +21% (receives increased offer), HeidelbergCement [HEI.DE] -1% (divestment).
• Technology: Solutions 30 [S30.FR] -75% (Auditor informs company not in a position to express opinion on its FY20 financial statements).

Speakers

• UK said to launch a review of tariffs of aluminum and steel under a new US strategy.
• South Africa President Ramaphosa stated that IMF SDR allocation of $33B was insufficient; Africa nations wanted 25% of SDR made available.
• Poland President Manowska stated that the Supreme Court to rule on FX loans soon.
• China Foreign Ministry spokesperson refuted press reports that three people were ill and hospitalized at Wuhan lab back in Nov 2019.
• Iran Foreign Min Zarif stated that Iran saw deal differences on sequencing and verification.

Currencies/Fixed Income

• USD was off its worst levels as mid-day approached and contained within its recent trading range. Overall trading was lackluster as volatility remained very subdued despite the recent price swings in commodities and cryptocurrencies. Dealers still believe that the greenback’s tone would remain soft with the market’s conviction that the Fed’s monetary policy would remain loose as the recent acceleration in inflation would prove transitory.

Economic data

• (FI) Finland Apr PPI M/M: 0.5% v 1.4% prior; Y/Y: 8.7% v 6.7% prior.
• (CZ) Czech May Consumer Confidence Index: -4.5 v -12.8 prior; Business Confidence: 11.6 v 6.8 prior; Composite Confidence (Consumer & Business): 8.4 v 2.9 prior.
• (TW) Taiwan Apr Industrial Production Y/Y: 13.6% v 18.0%e.
• (TW) Taiwan Apr Unemployment Rate: 3.7% v 3.7%e.
• (TR) Turkey Apr Foreign Tourist Arrivals Y/Y: 3,162.0% v 26.1% prior.
• (PL) Poland Apr Sold Industrial Output M/M: -9.2% v -10.0%e; Y/Y: 44.5% v 44.5%e.
• (PL) Poland Apr Real Retail Sales M/M: -7.7% v -3.9%e; Y/Y: 21.1% v 25.4%e; Retail Sales Y/Y: 25.7% v 28.5%e.
• (TW) Taiwan Apr M2 Money Supply Y/Y: 8.8% v 8.9% prior; M1 Money Supply Y/Y: 17.3% v 18.2% prior.

Fixed income Issuance

• None seen.

Looking Ahead

• (EU) Daily ECB Liquidity Stats.
• 05:30 (ZA) South Africa announces details of the upcoming I/L bond sale (held on Fridays).
• 06:00 (IL) Israel Apr Unemployment Rate: No est v 5.4% prior; Unemployment Rate (includes Covid impact): No est v 11.8% prior.
• 06:00 (IL) Israel Mar Manufacturing Production M/M: No est v -1.1% prior.
• 06:00 (IL) Israel to sell bonds.
• 06:00 (RO) Romania to sell RON300M in 4.75% 2034 Bonds.
• 07:00 (TR) Turkey to sell 2028 and 2030 Bonds.
• 07:25 (BR) Brazil Central Bank Weekly Economists Survey.
• 08:00 (UK) Daily Baltic Dry Bulk Index.
• 08:00 (IN) India announces details of upcoming bond sale (held on Fridays).
• 08:30 (US) Apr Chicago Fed National Activity Index: 1.10e v 1.71 prior.
• 08:30 (CL) Chile Central Bank Traders Survey.
• 09:00 (CL) Chile Apr PPI M/M: No est v 4.2% prior.
• 11:30 (US) Treasury to sell 13-Week and 26-Week Bills.
• 12:00 (RU) Russia Apr Unemployment Rate: 5.4%e v 5.4% prior.
• 12:00 (RU) Russia Apr Real Retail Sales Y/Y: 31.4%e v -3.4% prior.
• 16:00 (US) Weekly Crop Progress Report.
• 17:00 (KR) South Korea May Consumer Confidence: No est v 102.2 prior.
• 18:00 (HU) Hungary May Business Confidence: No est v -0.6 prior; Economic Sentiment: No est v -6.8 prior.
• 19:30 (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: No est v 112.5 prior.
• 20:00 (SG) Singapore Q1 Final GDP Q/Q: 2.7%e v 2.0% prelim; Y/Y: 0.9%e v 0.2% prelim.
• 21:30 (AU) Australia Apr Preliminary Merchandise Trade.
• 22:30 (KR) South Korea to sell KRW800B in 20-Yyar Bonds.
• 23:00 (KR) South Korea Q1 Household Credit (KRW): No est v 1726.1T prior.
• 23:30 (TH) Thailand Apr Customs Trade Balance: $0.6Be v $0.7B prior; Exports Y/Y: 10.4%e 8.5% prior; Imports Y/Y: 22.6%e v 14.1% prior.
• 23:30 (HK) Hong Kong to sell 3-month, 6-month and 12-month bills.