Focus On US Jobs Data

Notes/Observations

• Market focus on US Non-farm payroll data for clues on the outlook for Fed policy.

Asia:

• Indian Central Bank (RBI) left the Repurchase Rate unchanged at 4.00% (as expected). To maintain accommodative stance for as long as necessary and that the recent decline in inflation provided some room for policy. Expanded its QE bond-buying into the next quarter.
• Japan Apr Household Spending registered its largest annual rise since 2001 (YoY: 13.0% v 8.7%e).
• Japan Fiscal Blueprint Draft noted that the country must lay the groundwork for fiscal restoration by the time baby boomers reach age 75. Must aim for achieving fiscal target keeping in mind Japan fiscal state is in dire straights due to pandemic response.

Americas:

• White House believed Republicans were acting in good faith in negotiations on infrastructure; expecting could close the gap with Republicans over time.
• Senate GOP Leader McConnell stated that party was still hoping to reach an agreement with President Biden on a sig infrastructure package that was fully paid for.
• Fed’s Williams (FOMC voter) stated that it made sense for the Fed to be thinking through options it has in the future; right now view was we’re not near the ‘substantial further progress’ marker that had been set. Did not think time is now to take action on bond buys.
• Fed’s Kaplan (non-voter; hawkish) stated that supply-demand imbalances with material and labor were a challenge.

Speakers/Fixed income/FX/Commodities/Erratum

Equities

• Indices [Stoxx600 -0.01% at 450.76, FTSE -0.26% at 7,046.07, DAX -0.02% at 15,629.80, CAC-40 -0.09% at 6,501.94, IBEX-35 -0.52% at 9,095.00, FTSE MIB +0.01% at 25,455.50, SMI 0.00% at 11,510.78, S&P 500 Futures -0.05%].

Market Focal Points/Key Themes:

Equities

• European indices open mixed and little changed but trending to the downside as markets awaiting US jobs report to reassess economic recovery concerns; better-performing sectors include energy and consumer discretionary; techs and financials leading to the downside; on the corporate front, Vivendi in Paris trades slightly lower after Pershing Square Tontine Holdings confirmed discussions with Vivendi to acquire 10% stake in Universal Music Group for ~$4B; in other news AMS stock trade higher as much as 3% in Zurich following Acuity Brands’ announcement to acquire the items OSRAM Digital Systems Business in North America; no earnings expected in the upcoming US session.
• Consumer discretionary: Vivendi [VIV.FR] -1% (Pershing Square Tontine Holdings confirms to acquire 10% of UMG’s share capital).
• Energy: Victoria Oil & Gas [VOG.UK] +14% (corporate update).
• Healthcare: AstraZeneca [AZN.UK] +1% (new CFO; trial results).
• Technology: AMS [AMS.CH] +2% (divestment), Fingerprint Cards [FINGB.SE] -11% (withdraws outlook).

Speakers

• SNB President Jordan noted that : monetary policy could not replace govt on climate change.
• Italy Stats Agency (Istat) raised its 2021 GDP growth forecasts from 4.0% to 4.7% and set 2022 growth at 4.4%.
• Turkey Central Bank (CBRT) May inflation assessment report: PPI rise continued on import prices and supply issues.
• Russia Dep PM Novak stated that Russia’s compliance on the OPEC+ oil agreement was close to 100% in May.
• Taiwan govt raised its 2021 GDP growth forecast from 4.6% to 5.5%.
• Iran Supreme Leader Khamenei stated that sought action and not just rhetoric on revival of 2015 nuclear agreement.

Currencies/Fixed Income

• USD holding onto to recent gains and at multi-week highs following a string of better data. Market focus on US Non-farm payrolls data for clues on the outlook for Fed policy. Thursday’s initial jobless claims fell to another pandemic low and stoked worries the Fed could move quicker than expected to ease stimulus and tighten policy.
• EUR/USD holding above 1.21. Focus on next week’s ECB decision where analysts expect ECB to keep its purchase pace under the Pandemic Emergency Purchase Program unchanged.

Economic data

• (CZ) Czech Q1 Average Real Monthly Wage Y/Y: 1.0% v 1.7%e.
• (HU) Hungary Apr Retail Sales Y/Y: 10.6% v 14.3%e.
• (DE) Germany May Construction PMI: 44.5 v 46.2 prior.
• (SE) Sweden Q1 Current Account Balance (SEK): 78.3B v 57.4B prior.
• (TH) Thailand End-May Foreign Reserves: $251.9B v $250.4B prior.
• (CN) Weekly Shanghai copper inventories (SHFE): 201.7K v 207.8K tons prior.
• (TW) Taiwan Q1 Final GDP Y/Y: 8.9% v 8.2%e.
• (UK) May New Car Registrations Y/Y: 674.1% v 3,176.6% prior.
• (RU) Russia Narrow Money Supply w/e May 28th (RUB): 13.99T v 14.07T prior.
• (TW) Taiwan May Foreign Reserves: $543.0B v $541.1B prior.
• (UK) May Construction PMI: 64.2 v 62.0e(4th month of expansion).
• (EU) Euro Zone Apr Retail Sales M/M: -3.1% v -1.5%e; Y/Y: 23.9% v 25.0%e.
• (GR) Greece Q1 GDP Q/Q: 4.4% v 0.5%e; Y/Y: -2.3% v -6.9% prior; GDP NSA (unadj) Y/Y: -1.4% v -5.9% prior.

Fixed income Issuance

• None seen.

Looking Ahead

• G7 Finance Minister meeting in London.
• (RU) Russia May Light Vehicle Car Sales Y/Y: No est v 290.4% prior.
• 05:20 (EU) Daily ECB Liquidity Stats.
• 05:30 (ZA) South Africa to sell combined ZAR1.2B in I/L 2029, 2038, and 2050 Bonds.
• 06:00 (IE) Ireland Q1 GDP Q/Q: No est v -5.1% prior; Y/Y: No est v -1.5% prior.
• 06:00 (IE) Ireland Q1 Current Account Balance: No est v €7.1B prior.
• 06:00 (IE) Ireland May Live Register Monthly Change: No est v -3.5K prior; Live Register Level: No est v 181.8K prior.
• 06:00 (UK) DMO to sell £3.0B in 1-month, 3-month and 6-month bills (£0.5B, £1.0B and £1.5B respectively).
• 06:45 (US) Daily Libor Fixing.
• 07:00 (MX) Mexico May Vehicle Production: No est v 269.2K prior; Vehicle Exports: No est v 234.6K prior.
• 07:30 (TR) Turkey May Effective Exchange Rate (REER): No est v 62.29prior.
• 07:30 (IN) India Weekly Forex Reserve w/e May 28th: No est v $592.9B prior.
• 07:30 (IS) Iceland to sell 2024 and 2031 Bonds.
• 08:00 (UK) Daily Baltic Dry Bulk Index.
• 08:00 (IN) India announces upcoming bill issuance (held on Wed).
• 08:30 (US) May Change in Nonfarm Payrolls: +674Ke v +266K prior;Change in Manufacturing Payrolls: +25Ke v -18K prior.
• 08:30 (US) Unemployment Rate: 5.9%e v 6.1% prior; Underemployment Rate: No est v 10.4% prior; Labor Force Participation Rate: 61.8%e v 61.7% prior.
• 08:30 (US) May Average Hourly Earnings M/M: 0.2%e v 0.7% prior; Y/Y: 1.6%e v 0.3% prior; Average Weekly Hours: 34.9e v 35.0 prior.
• 08:30 (CA) Canada May Net Change in Employment: -22.5Ke v -207.1K prior; Unemployment Rate: 8.2%e v 8.1% prior; Full Time Employment Change: No est v -129.4K prior; Part Time Employment Change: No est v -77.8K prior; Participation Rate: 64.8%e v 64.9% prior; Hourly Wage Rate: -1.5%e v -1.6% prior.
• 08:30 (CA) Canada Q1 Labor Productivity Q/Q: -0.9%e v -2.0% prior.
• 08:30 (US) Weekly USDA Net Export Sales.
• 09:00 (BR) Brazil May PMI Services: No est v 42.9 prior; P(EU) Euro Zone Apr Retail Sales M/M: -3.1% v -1.5%e; Y/Y: 23.9% v 25.0%e MI Composite: No est v 44.5 prior.
• 10:00 (US) Apr Factory Orders: -0.3%e v +1.1% prior; Factory Orders (ex-transportation): No est v 1.7% prior.
• 10:00 (US) Apr Final Durable Goods Orders: -1.3%e v -1.3% prelim; Durable (ex-transportation): 1.0%e v 1.0% prelim; Capital Goods Orders (non-defense/ex-aircraft): 2.3%e v 2.3% prelim; Capital Goods Shipments (non-defense/ex-aircraft):No est v 0.9% prelim.
• 10:00 (CA) Canada May Ivey Purchasing Managers Index (seasonally adj): No est v 60.6 prior; PMI (unadj): No est v 59.9 prior.
• 11:00 (EU) Potential sovereign ratings after the European close.
• 12:00 (RU) Russia Apr Real Retail Sales Y/Y: +31.5%e v -3.4% prior.
• 13:00 (US) Weekly Baker Hughes Rig Count.

Weekend data

• 13:00 (CO) Colombia May CPI M/M: 0.7%e v 0.6% prior; Y/Y: 3.0%e v 2.0% prior.
• 13:00 (CO) Colombia May CPI Core M/M: No est v 0.3% prior; Y/Y: No est v 1.6% prior.