Notes/Observations
- Various global inflation data over the past 24 hours running hotter…key question that remains with the trend is transitory.
- UK CPI remained above BOE target for the 2nd straight month; could test the BOE’s view that inflation is transitory.
- Hawkish RBNZ as it halted its QE bond-buying program as a possible prelude to rate hikes.
- Awaiting Fed Chair Powell semi-annual testimony in Congress.
Asia
- Singapore Q2 Advance GDP Q/Q: -2.0% v -1.8%e; Y/Y: 14.3% v 14.6%e.
- RBNZ left the Official Cash Rate (OCR) unchanged at 0.25% (as expected) but announced would reduce the stimulus for the economy as inflation pressures rose and growth rebounded from the pandemic. To halt its purchases of NZ government bonds by July 23rd while maintaining the funding for the lending program for banks.
- Xi-Biden summit said to be moving closer with senior US diplomat Wendy Sherman’s China visit. US State Department No 2 will meet Chinese foreign vice-minister, Xie Feng, next week, paving the way for top-level encounter.
Americas
- Senate Democrats announce plans for $3.5 trillion budget package to expand Medicare.
- Senator Schumer (D-NY) stated that Senate Democrats had arrived at a $3.5T budget deal for spending and tax plans; budget to include medicare expansion.
- Democrats said to be quite confident they’ll pass Biden’s infrastructure deal and the rest of his economic plans through reconciliation.
- Fitch affirmed United States sovereign rating at AAA; Outlook Negative.
Energy
- Weekly API Crude Oil Inventories: -4.1M v -8.0M prior (8th straight weekly draw).
Speakers/Fixed income/FX/Commodities/Erratum
Equities
- Indices [Stoxx600 -0.31% at 459.54, FTSE -0.56% at 7,088.45, DAX -0.21% at -0.21% at 15,755.15 , CAC-40 -0.30% at 6,539.10 , IBEX-35 -0.54% at 8,648.00, FTSE MIB -0.03% at 25,149.50, SMI -0.58% at 12,001.39, S&P 500 Futures -0.03%].
- Market Focal Points/Key Themes: European indices open modestly lower across the board and failed to gain momentum as the session wore on; better performing sectors include technology and materials; while consumer discretionary and financials among those trending to the downside; Nordax raises offer for Norwegian Fians Holding; earnings expected in the upcoming US session include Bank of America, PNC Financial Services, Blackrock and Delta Airlines.
Equities
- Consumer discretionary: Hugo Boss [BOSS.DE] +5% (prelim earnings), Dunelm [DNLM.UK] -3% (trading update).
- Energy: Tullow Oil [TLW.UK] +3% (trading update; cuts outlook).
- Materials: SIG plc [SHI.UK] +4% (trading update).
- Telecom: Tele2 [TEL2B.SE] +4% (earnings).
Speakers
- Germany Economy Ministry saw inflation at 3.0% or higher but would to slow significantly in early 2022. Outlook for industrial economy remained positive. Bottlenecks for immediate products were having a dampening effect but not impacting the overall positive tone.
- Czech Central Bank Vice Gov Mora stated that was convinced to raise interest rates again during 2021 but not sure how many times. Pace of policy tightening would be determined by the shape of economic recovery.
- Germany HDE Retail Association: sees 2020 Retail Sales growth at 1.5%.
- China Banking Regulator (CBIRC): End-Jun Non-performing Loans at CNY3.5T; Bad Loan Ratio (NPLs): 1.86%. Liquidity risks were controllable. Expect banking sector profit growth to quicken notably in H1 as economy rebounds.
- Iran out-going President Rouhani stated that could enrich uranium to 90% purity if desired.
Currencies/Fixed Income
- Overall USD price action was subdued ahead of Fed Chair Powell semi-annual testimony in Congress. Some analysts believe Powell could be a tad more hawkish after US Jun CPI data hit a 13-year high at 5.4% on Wed.
- GBP was firmer in the aftermath of the higher Jun CPI reading from the UK. Analysts note reading could put pressure on BOE to scale back pandemic-era stimulus,.
- NZD currency (Kiwi) was firmer in the session after RBNZ announced it would reduce stimulus for the economy as inflation pressures rose and growth rebounded from the pandemic. Analysts now expect a potential rate hike as soon as next month (Aug).
Economic data
- (NL) Netherlands May Trade Balance: €4.8B v €5.2B prior.
- (FI) Finland Jun CPI M/M: -0.1% v +0.2% prior; Y/Y: 2.0% v 2.2% prior.
- (FI) Finland May Final Retail Sales Volume Y/Y: 4.8% v 1.6% prelim.
- (UK) Jun CPI M/M: 0.5% v 0.2%e; Y/Y: 2.5% v 2.2%e(2nd month annual pace above BOE target and highest since 2018); CPI Core Y/Y: 2.3% v 2.0%e; CPIH Y/Y: 2.4% v 2.2%e.
- (UK) Jun RPI M/M: 0.7% v 0.3%e; Y/Y: 3.9% v 3.4%e; RPI-X (ex-mortgage interest payments) Y/Y: 3.9% v 3.5%e; Retail Price Index: 304.0 v 302.7e.
- (UK) Jun PPI Input M/M: -0.1% v +1.1%e; Y/Y: 9.1% v 11.0%e.
- (UK) Jun PPI Output M/M: 0.4% v 0.6%e; Y/Y: 4.3% v 4.8%e.
- (IN) India Jun Wholesale Prices (WPI) Y/Y: 12.1% v 12.2%e.
- (ES) Spain Jun Final CPI M/M: 0.5% v 0.4%e; Y/Y: 2.7% v 2.6%e.
- (ES) Spain Jun Final CPI EU Harmonized M/M: 0.5% v 0.4%e; Y/Y: 2.5% v 2.4%e.
- (ES) Spain Jun CPI Core M/M: 0.1% v 0.3% prior; Y/Y: 0.2% v 0.2% prior.
- (SE) Sweden Jun CPI M/M: 0.1% v 0.1%e; Y/Y: 1.3% v 1.3%e; CPI Level: 341.32 v 341.32e.
- (SE) Sweden Jun CPIF M/M: 0.1% v 0.1%e; Y/Y: 1.6% v 1.5%e.
- (SE) Sweden Jun CPIF (ex-energy) M/M: 0.0% v 0.0%e; Y/Y: 0.9% v 0.9%e.
- (CZ) Czech May Current Account Balance (CZK): 7.2B v 15.5Be.
- (UK) May ONS House Price Index Y/Y: 10.0% v 9.4%e.
- (EU) Euro Zone May Industrial Production M/M: -1.0% v -0.3%e; Y/Y: 20.5% v 22.2%e.
- (IS) Iceland Jun International Reserves (ISK): 856B v 839B prior.
Fixed income Issuance
- (IN) India sold total INR170B vs. INR170B indicated in 3-month, 6-month and 12-month bills.
- (DK) Denmark sold total DKK5.0B in 3-month, 6-month, 9-month and 12-month bills.
Looking Ahead
- (CH) Switzerland to sell 2026, 2031 and 2055 Bonds.
- 05:25 (EU) Daily ECB Liquidity Stats.
- 05:30 (DE) Germany to sell €4.0B in 0% Aug 2031 Bunds.
- 05:30 (PT) Portugal Debt Agency (IGCP) to sell €0.75-1.0B in 2030 and 2037 OT bonds.
- 05:30 (ZA) South Africa announces details of next bond auction (held on Tuesdays).
- 06:00 (IE) Ireland May Property Prices M/M: No est v 0.8% prior; Y/Y: No est v 4.5% prior.
- 06:45 (US) Daily Libor Fixing.
- 07:00 (RU) Russia to sell combined RUB20B in 2029 and 2036 OFZ Bonds.
- 07:00 (US) MBA Mortgage Applications w/e July 9th: No est v -1.8% prior.
- 07:00 (ZA) South Africa May Retail Sales M/M: +0.9%e v -0.8% prior; Y/Y: 12.3%e v 95.8% prior.
- 07:00 (TR) Turkey Central Bank (CBRT) Interest Rate Decision: Expected to leave One-Week Repo Rate unchanged at 19.00%.
- 07:00 (UK) Weekly PM Question time in House.
- 08:00 (PL) Poland May Current Account Balance: €1.3Be v €1.7B prior; Trade Balance: €1.0Be v €1.3B prior; Exports: €22.9Be v €23.4B prior; Imports: €21.8Be v €22.1B prior.
- 08:00 (BR) Brazil May Economic Activity Index (Monthly GDP): M/M: 1.1%e v 0.4% prior; Y/Y: 15.7%e v 15.9% prior.
- 08:00 (UK) Daily Baltic Dry Bulk Index.
- 08:30 (US) Jun PPI Final Demand M/M: 0.6%e v 0.8% prior; Y/Y: 6.7%e v 6.6% prior.
- 08:30 (US) Jun PPI (ex-food/energy) M/M: 0.5%e v 0.7% prior; Y/Y: 5.1%e v 4.8% prior.
- 08:30 (US) Jun PPI (ex-food/energy/trade) M/M: 0.5%e v 0.7% prior; Y/Y: 5.6%e v 5.3% prior.
- 08:30 (CA) Canada May Manufacturing Sales M/M: +1.0%e v -2.1% prior.
- 08:45 (DE) ECB’s Schnabel (Germany).
- 09:45 (UK) BOE to buy £1.147B in APF Gilt purchase operation (7-20 years).
- 10:00 (CA) Bank of Canada (BOC) Interest Rate Decision: Expected to leave Interest Rates unchanged at 0.25%.
- 10:30 (US) Weekly DOE Oil Inventories.
- 12:00 (US) Fed chief Powell semi-annual testimony in Senate.
- 13:00 (UK) BOE’s Ramsden.
- 13:30 (US) Fed’s Kashkari.
- 14:00 (US) Federal Reserve Beige Book.
- 15:00 (AR) Argentina May Capacity Utilization: No est v 63.5% prior.
- 18:00 (CL) Chile Central Bank (BCCh) Interest Rate Decision: expected to raise Overnight Rate Target by 25bps to 0.75%.
- 21:00 (KR) Bank of Korea (BoK) Interest Rate Decision: Expected to leave 7-Day Repo Rate unchanged at 0.50%.
- 21:00 (AU) Australia July Consumer Inflation Expectation Survey: No est v 4.4% prior.
- 21:30 (CN) China Jun New Home Prices M/M: No est v % prior.
- 21:30 (AU) Australia Jun Employment Change: +20.0Ke v +115.2K prior; Unemployment Rate: 5.1%e v 5.1% prior; Full Time Employment Change: No est v +97.5K prior; Part Time Employment Change: No est v +17.7K prior; Participation Rate: 66.2%e v 66.2%.
- 22:00 (CN) China Q2 GDP Q/Q: 1.0%e v 0.6% prior; Y/Y: 8.0%e v 18.3% prior; GDP YTD Y/Y: 12.7%e v 18.3% prior.
- 22:00 (CN) China Jun Retail Sales Y/Y: 10.8%e v 12.4% prior; Retail Sales YTD Y/Y: 22.8%e v 25.7% prior.
- 22:00 (CN) China Jun Industrial Production Y/Y: 7.8%e v 8.8% prior; Industrial Production YTD Y/Y: 16.0%e v 17.8% prior.
- 22:00 (CN) China Jun YTD Fixed Urban Assets Y/Y: 12.0%e v 15.4% prior.
- 22:00 (CN) China Jun YTD Property Investment Y/Y: 16.0%e v 18.3% prior.
- 22:00 (CN) China Jun Surveyed Jobless Rate: 5.0%e v 5.0% prior.
- 23:30 (JP) Japan to sell 3-Month Bills.
