Norway CPI surprises to downside – Chips sector in focus after TSMC sales, Samsung strike

EU Mid-Market Update: Norway CPI surprises to downside; Chips sector in focus after TSMC sales, Samsung strike; First Senate Democrat to publicly criticize Biden's bid; Powell returns to second day of semi-annual testimony.

Notes/observations

- Sen Michael Bennet (D-Colo.) became the first Senate Democrat to publicly criticize Biden's bid and added that he thinks Trump is on track to win US election and maybe win it by a landslide, taking with him the Senate and the House.

- TSMC monthly sales pace accelerated once again; In other news in chip sector, the first strike in the Samsung's 55-year history now called “indefinite” by union; Note that Samsung was speculated to supply HBM3E chips to Nvidia this year, but it was Not yet confirmed by companies.

- Markets keep digesting comments made by Fed Chair Powell during his first out of two semi-annual testimonies this week; Markets reactions seem to be focused on Fed inching closer to rate cuts after Powell emphasized dual-mandate and weakening labor market.

- China Commerce Ministry announced EU anti-subsidy probe amid probes on Chinese firms; Investigation to last from July 10th to Jan 10th, 2025.

- Reserve Bank of New Zealand (RBNZ), after hawkish hold at the May meeting, once again held rates unchanged at its overnight’s meeting, but changed its stance to what is described by some analysts as “realistically dovish”.

- Norway CPI Y/Y came below expectations at slowest pace in over 3 years.

- Microsoft reportedly ditched its non-voting board observer seat at OpenAI amid regulatory scrutiny, while Apple will Not take up observer role on OpeaAI board despite earlier speculations.

- Fed Chair Powell returns to Capitol Hill today, for the second day of his semi-annual testimony, this time before the House of Representatives. Another Q&A expected.

- Asia closed mixed with Nikkei225 outperforming +0.5%. EU indices are -0.1% to +0.5%. US futures are +0.1-0.2%. Gold +0.4%, DXY +0.0%; Commodity: Brent -0.1%, WTI -0.1%; Crypto: BTC +1.2%, ETH +0.7%.

Asia

- Samsung's main South Korea labor union (~30K workers, about 25% of Samsung total): Plans strike for an 'indefinite period' [**Note: prior intent was to be only three days].

- China Commerce Min (MOFCOM): To investigate into EU anti-subsidy probe amid probes on Chinese firms - financial press.

- Thai Court to resume Thailand PM Srettha ethics case on July 24th - financial press.

- Nikkei hits fresh record high.

- Reuters poll: China's PBOC seen cutting RRR by 25bps in Q3 and cutting one-year LPR by 10bps also in Q3.

Taiwan

- US Top Diplomat in Taiwan: Highlights US commitment to supporting Taiwan's ability to defend itself - statement.

Mid-East

- Saudi Arabia reportedly warned G7 against Russia seizures with threat to sell debt - press [**Note: Saudi Arabia holdings of euro and French bonds may amount to tens of billions of euros].

Ukraine conflict

- US Pres Biden: US and allies intend to provide Ukraine with dozens of tactical air defense systems in the coming months - NATO summit.

- US Pres Biden to meet with Ukrainian Pres Zelenskiy on Thursday.

- US Nat Sec Adviser Sullivan: Every NATO ally to pledge to develop plans to strengthen their industrial capacity; Putin can't divide us, outlast us or weaken us.

Europe

- Norway Jun CPI M/M: 0.2% v 0.6%e; Y/Y: 2.6% v 3.0%e (lowest annual pace since early 2021).

- Ireland Finance Ministry: To introduce €8.3B budget package for 2025; 6.9% proposed increase breaks 5% rule.

- ECB’s Vujcic (Croatia) said to be reappointed for a third six-year term - press.

Americas

- Fed Chair Powell: Most recent labor market data sends a signal of cooling; We're well aware of two-sided risks; Won't send signals about timing of future Fed actions today - Q&A.

- Sen Michael Bennet (D-Colo.): Donald Trump is on track, I think, to win this election and maybe win it by a landslide; Trump could take with him the Senate and the House if he wins in Nov - Axios [**Note: the first Senate Democrat to publicly criticize Biden's bid].

- According to AP-NORC poll, support for legal abortion has risen since Supreme Court eliminated protections - press.

- Weekly API Crude Oil Inventories: -1.9M v -9.2M prior.

- US Pres Biden signs bill bolstering nuclear power; Bipartisan nuclear package is expected to speed up the timeline for licensing new nuclear reactors and cut fees that companies have to pay to do so.

Energy

-Russia weekly oil flows reportedly dropped by 1Mbpd (biggest drop since Ukraine war started in Feb 2022) - press.

-Russia Dep PM Novak: Russia may increase LNG supply to India - press.

-EIA raises forecast for 2025 World Oil demand to 1.8M bpd y/y; Affirms 2024 World Oil demand 1.10M bpd y/y.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 +0.41% at 513.86, FTSE +0.45% at 8,176.40, DAX +0.58% at 18,330.05, CAC-40 +0.54% at 7,548.25, IBEX-35 +0.74% at 10,979.00, FTSE MIB +0.58% at 34,062.00, SMI +0.18% at 12,064.20, S&P 500 Futures +0.14%].

Market focal points/key themes: European indices open higher across the board and remained upbeat through the early part of the session; among sectors leading the way higher are telecom and consumer discretionary; lagging sectors include materials and communication services; Equals Group receives takeover offer from consortium; reportedly Grifols family asks Brookfield for a capital increase but Brookfield seeks to keep the company; Enagas to sell its stake in Tallgrass to Blackstone; reportedly Ango American hires banks to work on sale of coal assets; continued focus on Fed Chair Powell testimony on Capitol Hill; no major earnings expected in the upcoming US session.

Equities

- Consumer discretionary: Lufthansa [LHA.DE] -1.0% (analyst action), Delivery Hero [DHER.DE] +3.0% (Delivery Hero-backs app Baemin to raise its commission fee for South Korean restaurants), IAG [IAG.UK] +3.0% (analyst action).

- Financials: Crest Nicholson [CRST.UK] +5.0% (to be acquired by Bellway).

- Industrials: Volkswagen [VOW3.DE] -1.0% (outlook cut), Hapag-Lloyd [HLAG.DE] +5.5% (raises outlook), Mercedes-Benz [MBG.DE] -0.5% (Q2 vehicle sales), Barratt Developments [BDEV.UK] -3.5% (trading update).

- Technology: Infineon [IFX.DE] +1.0% (TSMC monthly sales pace accelerates; Samsung indefinite strike).

Speakers

- (TW) US Top Diplomat in Taiwan: Highlights US commitment to supporting Taiwan's ability to defend itself - statement.

- (EU) ECB SSM member McCaul reiterates rising risks from shadow banking which could translate into a systemic threat - FT.

- (HU) Hungary Econ Min Nagy: Prefers lower rates to boost economy - financial press.

Currencies/fixed income

Economic data

- (NO) Norway Jun CPI M/M: 0.2% v 0.6%e; Y/Y: 2.6% v 3.0%e (lowest annual pace since early 2021).

- (CZ) Czech Jun CPI M/M: -0.3% v +0.2%e; Y/Y: 2.0% v 2.4%e (back to target for 1st time in 3 months).

- (IT) Italy May Industrial Production M/M: 0.5% v 0.0%e; Y/Y: -3.3% v -2.9% prior.

- (NL) Netherlands May Manufacturing Production M/M: -0.4% v +0.5% prior; Y/Y: -3.0% v -3.4% prior- (FI) Finland May Industrial Production M/M: 1.2% v 0.1% prior; Y/Y: -5.3% v -6.7% prior.

- (DK) Denmark Jun CPI M/M: 0.0% v 0.0% prior; Y/Y: 1.8% v 2.2% prior.

- (TR) Turkey May Industrial Production M/M: +1.7% v +3.8%e; Y/Y: -0.1% v +2.6%e.

- (TR) Turkey May Unemployment Rate: 8.4% v 8.5% prior.

- (CZ) Czech May Import Price Index Y/Y: 2.7% v 3.5% prior; Export Price Index Y/Y: 3.3% v 4.9% prior.

- (AT) Austria May Industrial Production M/M: -1.4% v +0.8% prior; Y/Y: -4.1% v -2.6% prior.

- (GR) Greece May Industrial Production Y/Y: +6.7% v +11.7% prior.

Fixed income issuance

- Saudi Aramco to sell US-denominated 10-year, 30-year and 40-year bonds (its 1st bond sale since 2021).

- (IT) Italy Debt Agency (Tesoro) sells €8.0B vs. €8.0B indicated in 12-month Bills; Avg Yield: 3.483% v 3.584% prior; Bid-to-cover: 1.37x v 1.40x prior.

-(DK) Denmark sells total DKK1.91B in 2026, 2033 DGB Bonds.

- (HK) China MOF sells total of CNY9.0B v CNY9.0B indicated in bonds in Hong Kong due 2026, 2027 and 2029.

- (IN) India sells total INR200B vs. INR200B indicated in 3-month, 6-month and 12-month bills.

- (DK) Denmark sells total DKK1.91B in 2026, 2033 DGB Bonds.

Looking ahead

- 05:30 (DE) Germany to sell combined €2.0B in 2036 and 2038 bunds.

- 06:00 (IL) Israel Jun Consumer Confidence: No est v 44 prior.

- 06:00 (PT) Portugal Jun Final CPI M/M: No est v % prelim; Y/Y: No est v % prelim.

- 06:00 (PT) Portugal Jun CPI EU Harmonized M/M: No est v % prelim; Y/Y: No est v % prelim.

- 06:00 (PT) Portugal May Trade Balance: No est v -€2.4B prior.

- 07:00 (US) MBA Mortgage Applications w/e July 5th: No est v % prior.

- 08:00 (IS) Iceland Jun Unemployment Rate: No est v 3.4% prior.

- 08:00 (HU) Hungary Central Bank (MNB) June Minutes.

- 08:00 (BR) Brazil Jun IBGE Inflation IPCA M/M: No est v 0.5% prior; Y/Y: No est v 3.9% prior.

- 08:00 (UK) Daily Baltic Dry Bulk Index.

- 08:30 (UR) Ukraine Jun CPI M/M: No est v 0.6% prior; Y/Y: No est v 3.3% prior.

- 08:30 (CL) Chile Central Bank Economist Survey.

- 09:30 UK BOE Chief Economist Huw Pill participates in a discussion at UK's Asia House think tank.

- 10:00 (US) May Final Wholesale Inventories M/M: No est v % prelim; Wholesale Trade Sales M/M: No est v 0.1% prior.

- 10:00 Fed Chair Powell testifies to House Financial Services.

- 10:00 German Buba President Nagel participates in a panel discussion at the Bundesbank Invited Speaker Series (Frankfurt).

- 10:30 (US) Weekly DOE Oil Inventories.

- 11:30 UK MPC Member Catherine Mann participates in a panel discussion titled "The Transformative Power of Productivity" at the University of Manchester.

- 11:30 Federal Reserve Bank of Atlanta President Bostic.

- 11:30 (US) Treasury to sell 17-Week Bills.

- 12:00 (RU) Russia Jun CPI M/M: No est v 0.7% prior; Y/Y: No est v 8.3% prior; CPI Core M/M: No est v 0.9% prior; Y/Y: No est v 8.6% prior.

- 13:00 Federal Reserve Bank of St. Louis President Musalem.

- 13:00 (US) Treasury to sell 10-Year Notes Reopening.

- 18:45 (NZ) New Zealand Jun Food Prices M/M: No est v -0.2% prior.

- 19:00 (AU) Australia Jun CBA Household Spending M/M: No est v 1.1% prior; Y/Y: No est v 4.3% prior.

- 19:01 (UK) Jun RICS House Price Balance: No est v -17% prior.

- 19:50 (JP) Japan May Core Machine Orders M/M: No est v % prior; Y/Y: No est v % prior.

- 21:00 (AU) Australia July Consumer Inflation Expectation Survey: No est v 4.1% prior.

- 22:00 (JP) Japan Jun Tokyo Avg Office Vacancies: No est v 5.5% prior.

- 23:35 (JP) Japan to sell 20-year JGB Bonds.