- Risk sentiment is soured from ‘rates should be higher for longer’ mantra spoken by Fed members Mester and Bostic in afternoon session yesterday. Plenty more Fed speak scheduled today. Tech stocks/Nasdaq held up due to NVDA optimism ahead of earnings on Wed.

- Crypto leapt higher after reports circulated there is 75% chance that SEC could approve Ethereum spot ETFs this week. BTC +6.5%, ETH +18%.

- Spanish IBEX-35 outperforms EU region, led by the likes of BBVA, Sabadell and Telefonica, in focus for M&A.

- As geopolitical tensions simmer between China/US, ASML and TSMC said they have remote ability to disable chip-making machines in Taiwan in the event China invades.

- Corporate debt issuance remains elevated.

- Asia closed lower with Hang Seng underperforming -2.1%. EU indices are -0.1% to -1.0%. US futures are -0.1% to 0.0%. Gold -0.4%, DXY -0.4%; Commodity: Brent -0.9%, WTI -0.9%.


- RBA May Minutes Reiterated stance that was difficult to rule in or out changes to the cash rate. Did consider a rate hike but decided to avoid excessive fine-tuning of rates. Recent flow of data had increased risk of inflation staying above band.

- Australia May Consumer Confidence: 82.2 v 82.4 prior.

- South Korea May Consumer Confidence: 98.4 v 100.7 prior.

- South Korea Q1 Household Credit (KRW): 1,883T v 1,885T prior (first q/q decline since end-Mar 2023).

- South Korea May 1-20th Exports Y/Y: 1.5% v 11.1% prior; Imports Y/Y: -9.8% v +6.1% prior.

- New Zealand Treasury: Sees no near-term turning point for the economy.

- Japan Fin Min Suzuki commented that the upcoming G7 meeting this week to focus on global economy, AI and other issues; Reiterated concerns on weak Yen currency. Noted that was more concerned about negative aspects and closely watching FX moves. Reiterated excessive FX volatility is undesirable; will deal with appropriately as needed.


- Fed's Mester (voter) commented that the recent Apr CPI report was good news but too soon to tell what path inflation was on. Monetary policy was moderating demand, but not as fast as expected; still believed inflation is going to come down. Previously expected three rate cuts this year but no longer think that was still appropriate.

- Fed's Daly (voter) stated that was not yet confident inflation was coming down to 2% sustainably; Did not see any evidence right now of need to raise rates.

Speakers/fixed income/FX/commodities/erratum


Indices [Stoxx600 -0.3% at 5,045, FTSE -0.5% at 8,384, DAX -0.5% at 18,676, CAC-40 -0.8% at 8,127, IBEX-35 -0.1% at 11,336, FTSE MIB -0.9% at 34,509, SMI -0.1% at 12,032, S&P 500 Futures 0.0%].

Market focal points/key themes: European indices open generally lower and remained under pressure through the early part of the session; EU yields slightly higher potentially weighing on risk appetite; sectors holding on to the green include telecom and communication services; among sectors leading the way lower are financials and real estate; XP power receives possible takeover offer from Advanced Energy Industries; earnings expected in the upcoming US session include Lowe’s, AutoZone, Macy’s and Toll Brothers.


- Consumer staples: Kingfisher [KGF.UK] -1.5% (trading update, cautious outlook).

- Energy: Siemens Energy [ENR.DE] -2.5% (plans to sell Indian wind business at $1.0B valuation.

- Financials: Assicurazioni Generali [G.IT] -3.0% (results).

- Healthcare: Astrazeneca [AZN.UK] +1.0% (targets $80B in revenue by FY30).

- Utilities: Pennon [PNN.UK] -8.0% (FY results).

- Industrials: Smiths Group [SMIN.UK] +0.5% (Q3 trading update, notes strong demand).


- Hungary Econ Min Nagy reiterated criticism of Hungary Central Bank and accused the central bank of being unable to co-operate over economic strategy.

- Treasury Sec Yellen commented that continued to explore new ways to reduce Russia's revenues and acquire goods for its war in Ukraine.

- Philippine Central Bank (BSP) Gov Remolona stated that would participate in FX market as needed to smooth excessive volatility.

Currencies/fixed income

- FX markets continued its lackluster momentum as focus remained on upcoming central bank speak. USD consolidating as more Fed speak doal back hopes of a near-term rate cut.

- EUR/USD at 1.0865 in quiet trading. Little in terms of data to spark fresh position taking.

- GBP/USD at 1.2715 with focus on Wed’s release of UK inflation data.

- USD/JPY above 156 level despite continued rhetoric by Japanese officials on potential negative side effects from a weak yen currency.

Economic data

- (DE) Germany Apr PPI M/M: 0.2% v 0.3%e; Y/Y: -3.3% v -3.1%e.

- (SE) Sweden Q1 Industry Capacity: 88.6% v 88.4% prior.

- (DK) Denmark Q1 Preliminary GDP Q/Q: -1.8%% v +2.7% prior; Y/Y: 0.2% v 3.5% prior.

- (CH) Swiss Apr M3 Money Supply Y/Y: -1.1% v -1.5% prior.

- (ZA) South Africa Mar Leading Indicator: 110.4 v 112.5 prior.

- (EU) Euro Zone Mar Current Account Balance: €35.8B v €28.9B prior.

- (GR) Greece Mar Current Account Balance: -€2.7B v -€3.2B prior.

- (CH) Swiss Weekly Total Sight Deposits (CHF): 467.4B v 468.9B prior; Domestic Sight Deposits: 459.0B v 460.3B prior.

- (IT) Italy Mar Current Account Balance: €1.5B v €2.3B prior.

- (EU) Euro Zone Mar Trade Balance: €17.3B v €20.0Be; Trade Balance (unadj): €24.1B v 23.6B prior.

- (EU) Euro Zone Mar Construction Output M/M: 0.1% v 1.8% prior; Y/Y: +0.1% v -0.4% prior.

Fixed income issuance

- (UK) DMO sold £2.25B in 4.75% Oct 2043 Green Gilts; Avg Yield: 4.580% v 4.495% prior; bid-to-cover: 3.67x v 3.67x prior; Tail: 0.4bps v 0.1bps prior.

- (AT) Austria Debt Agency (AFFA) sold total €2.207B vs. €2.75B indicated in 3-month and 6-month Bills.

Looking ahead

- (NG) Nigeria Central Bank (CBN) Interest Rate Decision: Expected to raise Interest Rates by 100bps to 25.75%.

- (MX) Mexico CitiBanamex Survey of Economists.

- 05:25 (EU) Daily ECB Liquidity Stats.

- 05:30 (CH) Switzerland to sell 3-month Bills.

- 05:30 (DE) Germany to sell €4.0B in 2.1% Apr 2029 BOBL.

- 05:30 (NL) Netherlands Debt Agency (DSTA) to sell €2.0-3.0B in 3-month and 6-month Bills.

- 05:30 (HU) Hungary Debt Agency (AKK) to sell 3-Month Bills.

- 05:30 (ZA) South Africa to sell combined ZAR3.75B in 2031, 2037 and 2048 bonds.

- 05:30 (EU) ECB allotment in 7-Day Main Refinancing Tender (MRO).

- 06:00 (UK) May CBI Industrial Trends Total Orders: -20e v -23 prior; Selling Prices: 25e v 27 prior.

- 06:00 (FI) Finland to sell €1.5B in 2029 and 2034 RFGB Bonds.

- 06:30 (SE) Sweden Central Bank (Riksbank) Bunge.

- 06:30 (EU) ESM to sell €1.1B in 6-month Bills.

- 06:30 (TR) Turkey to sell Bonds (2 tranches).

- 08:00 (HU) Hungary Central Bank (MNB) Interest Rate Decision: Expected to cut Base Rate by 50bps to 7.25%.

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

- 08:00 (RU) Russia announcement on upcoming OFZ bond issuance (held on Wed).

- (NG) Nigeria Central Bank Interest Rate Decision.

- 08:30 (US) May Philadelphia Fed Non-Manufacturing Activity Regional Index: No est v -12.4 prior.

- 08:30 (CA) Canada Apr CPI M/M: 0.5%e v 0.6% prior; Y/Y: 2.7%e v 2.9% prior; CPI Core-Trim Y/Y: 2.9%e v 3.1% prior; Core-Median Y/Y: 2.7%e v 2.8% prior; Consumer Price Index: 160.7e v 159.8 prior.

- 08:55 (US) Weekly Redbook LFL Sales data.

- 09:00 (FR) France Debt Agency (AFT) to sell €5.9-7.5B in 3-month, 6-month and 12-month bills.

- 09:00 (US) Fed’s Barkin.

- 09:00 (US) Fed’s Waller.

- 09:00 (US) Fed’s Williams.

- 09:00 (US) Fed’s Bostic.

- 09:00 (HU) Hungary Central Bank (MNB) post rate decision statement.

- 11:00 (CO) Colombia Mar Trade Balance: -$1.2Be v -$0.8B prior; Total Imports: $5.0Be v $4.8B prior.

- 11:45 (US) Fed’s Barr.

- 13:00 (UK) BOE Gov Bailey.

- 15:00 (AR) Argentina Apr Trade Balance: $2.2Be v $2.1B prior.

- 16:30 (US) Weekly API Oil Inventories.

- 17:00 (KR) South Korea Apr PPI Y/Y: No est v 1.6% prior

- 17:00 (KR) South Korea Jun Business Manufacturing Survey: No est v 74 prior; Non-Manufacturing Survey: No est v 71 prior.

- 18:00 (NL) Netherlands Apr House Price Index M/M: No est v 0.7% prior; Y/Y: No est v 5.4% prior.

- 19:00 US) Fed’s Bosic, Collins and Mester participate on panel.

- 19:50 (JP) Japan Apr Trade Balance: -¥297.0Be v ¥387.0B prior (revised from ¥366.5B); Adjusted Trade Balance: -¥717.6Be v -¥701.5B prior; Exports Y/Y: 11.0%e v 7.3% prior; Imports Y/Y: +8.8%e v -5.1% prior (revised from -4.9%).

- 19:50 (JP) Japan Mar Core Machine Orders M/M: -2.0%e v +7.7% prior; Y/Y: +1.4%e v -1.8% prior.

- 22:00 (NZ) Reserve Bank of New Zealand (RBNZ) Interest Rate Decision: Expected to leave Official Cash Rate (OCR) unchanged at 5.50%.

- 23:00 (KR) South Korea Q1 Short-Term External Debt: No est v $136.2B prior.

- 23:35 (JP) Japan to sell 40-Year JGB Bonds.

- 23:00 (NZ) RBNZ Gov Orr post rate decision press conference.

- (US) Kentucky Democratic Primary and GOP Primary.

- (US) Oregon Democratic Primary and GOP Primary.

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