Notes/Observations

- Oil prices rebound from 5-month lows after ‘suspected attack' on tanker in Sea of Oman

- Eurogroup meets to discuss Italy and its debt situation

- Protests continue in Hong Kong as Legislator again postpones vote on extradition bill

Asia:

- Australia Jun Consumer Inflation Expectation: 3.3% v 3.3% prior

- Australia May Employment Change: +42.3K v +16.0Ke; Unemployment Rate: 5.2% v 5.1%e

- China Global Times Editor-in-chief Hu Xijin tweeted: "It's rare to see scathing attacks against the US in state media. This shows Beijing was preparing for China-US ties [to further worsen]."

- Hong Kong Legislator again postpones meeting on China extradition bill (second delay) as protests continue

- China Vice Premier Liu He reiterated that growth, employment, balance payment were within a reasonable range. China had sufficient policy tools to meet challenges (Note: had no comments on trade with the US)

- China FX Regulator SAFE Chief Pan Gongsheng: FX market had been generally stable, fully confident to maintain FX market stability

- China inflation and the global dovish monetary environment may provide more room for the China authorities to adjust money and credit supplies as a tool to counter downside risks if trade tension escalated

Europe/Mideast:

- UK Parliament rejected Labour-backed bid to block no-deal Brexit in 309-298 vote

Americas:

- President Trump stated that he had a feeling that we're going to make a deal with china; if US could not make a deal with china then tariffs on $325B of Chinese goods would be implemented

Energy:

- Algeria reportedly raised idea of OPEC+ supply cut of 1.8M bpd in H2'19 (up from 1.2M currently). OPEC+ still expected to roll over oil supply cut of 1.2M bpd beyond June

 

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

Indices [Stoxx600 +0.28% at 380.80, FTSE +0.26% at 7,386.75, DAX +0.58% at 12,184.77, CAC-40 +0.12% at 5,381.25, IBEX-35 +0.44% at 9,280.02, FTSE MIB +0.49% at 20,571.50, SMI +0.42% at 9,898.50, S&P 500 Futures +0.31%]

Market Focal Points/Key Themes: European Indices trade higher across the board recovering from earlier losses tracking a mixed session in Asia over night and higher US futures. Oil names rebound as crude prices advance following an attack in the Gulf of Oman on two Japanese Oil tankers, raising fears of further confrontation. On the corporate front shares of Record Plc gains over 13% after a rise in profits and Revenue, with Just Group another notable gainer following comments at its AGM. Aurubis is a notable decliner after issuing a profit warning for Q3 and FY19, with Majestic Wines and PZ Cussons also declining on earnings and outlook. In other news 1&1 Drillisch, Telefonica Deutschland and United Internet are among the gainers following the completion of the 5G auctions in Germany. Elsewhere Marks & Spencer declines following the results of its rights issue; VARTA gains on following a placing, while Ferguson also gains after Trian Funds acquires at ~6% stake. Looking ahead notable earners include Francesca's Holding, Duluth Holding's and Destination Maternity among others.

 

Equities

- Consumer discretionary: Tesco [TSCO.UK] +0.5% (trading update), Just Group [JUST.UK] +10% (AGM statement), Ferguson [FERG.UK] +6.5% (stake purchased), Majestic Wine [WINE.UK] -9% (earnings; Chairman steps down), Marks & Spencer [MKS.UK] -3% (results of placing), PZ Cussons [PZC.UK] -4% (trading update; CFO resigns)

- Financials: Record [REC.UK] +12.5% (earnings)

- Industrials: Thales [HO.FR] +3% (adjusts outlook), Aurubis [NDA.DE] -10.5% (profit warning)

- Technology: Soitec [SOI.FR] +2.5% (AGM), United Internet [UTDI.DE] +5%, 1&1 Drillisch [DRI.DE] +9% (German 5G auction results), Sopheon [SPE.UK] -2% (trading update)

 

Speakers

- Swiss National Bank (SNB) left the Sight Deposit Rate unchanged at -0.75% and maintained the 3-Month Libor Target Range between -1.25% to -0.25% (both as expected). SNB did introduce a new a policy rate to replace the target range as the future of Libor was not guaranteed and it currently stood at -0.75%. SNB reiterated that the Swiss franc was highly valued, and the situation on the FX market remained fragile. Reiterated prepared to intervene in markets if needed. Inflationary pressure were likely to remain moderate but the risks to this baseline scenario were still to the downside

- SNB Financial Stability Report noted that it was making progress in "too big to fail" regulations in the areas of both resilience and resolution. Banks further raised exposure to mortgages and real estate. SNB was closely monitoring residential property and saw the need for targeted measures. Rate risk from maturity transformation remained high

- SNB quarterly forecasts maintained GDP at 1.5% while raising 2019 CPI from 0.3% to 0.6% and 2020 CPI from 0.6% to 0.7%

- SNB Jordan post rate decision press conference reiterated that the Swiss franc was highly valued, and the situation on the FX market remained fragile. Expansionary monetary policy remained necessary. Change to Swiss policy rate needed because future of Libor was not guaranteed, adjustment meant no change to current monetary policy. SNB noted that inflationary expectations had declined slightly

- Swiss SECO June Economic Forecasts raised 2019 GDP from 1.1% to 1.2% while maintaining 2020 GDP at 1.7%. It raised 2019 CPI from 0.4% to 0.6% while maintaining 2020 CPI at 0.6%. Saw the risks of major correction in domestic housing market

- Swiss KOF Institute Summer Economic Forecast raised 2019 GDP growth from 1.0% to 1.6% and 2020 GDP growth from 2.1% to 2.3%. It maintained both 2019 and 2020 CPI at 0.5% and 0.6% respectively

- ECB: Global use of the Euro rose last year, mostly on diversification away from the dollar, due in part to political concerns

- German Economic Ministry commented that it expected a better global economy in H2 buts its domestic situation for Q2 remained subdued. Domestic economy remained intact but being held back by export industry due to part to trade conflicts. Domestic consumption was strong

- Eurogroup cheif Centeno: To discuss Italy debt at today's meeting; Needed to clarify political decisions needed to make the country compliant with EU rules

- Italy Dep PM Di Maio (5-Star) reiterated coalition govt stance that taxes must be cut to reduce debt and increase economic growth

- France Fin Min Le Maire: To propose spending cuts in 1st half of July to help fund President Macron's reduction in income tax

- Czech Central Bank's Benda reiterated stance that saw room for higher rates and would consider voting for hike in Jun meeting

- EU reportedly planned bilateral trade pacts with WTO members

- China Commerce Ministry (MOFCOM) Spokesman Gao Feng reiterated govt stance that China to fight to the end if US insisted to escalate. China would not back down on principle issues in trade talks. Trade war will bring recession to both US and global economy

- China Foreign Ministry spokesperson Geng Shuang: Hong Kong matters were purely an internal situation; deplored, opposes EU comments on Hong Kong

- Japan PM Abe commented that Iran's Supreme leader Khamenei spoke of his belief of peace and indicated that the country did not have any intention to possess or use nuclear weapons

 

Currencies/Fixed Income

- USD: The US Dollar continued its grind lower yesterday as the dollar index bounced in between the 96.5 and 97 handle. There haven't been any new comments to move the dollar coming out of the White House or China so we could see this range trading continue. Both sides are hoping to have its President meet at the G20 towards the end of June.

- EUR: After selling off yesterday the Euro is now trading back below the 1.13 handle. With the lack of comments coming from Draghi yesterday and no more major news due out this week, the Euro should see volatility lower than last week. The only things we may get are comments from Italy regarding taxes and their tensions with the EU. Eurogroup meets today and would discuss Italy debt and look to clarify political decisions needed to make the country compliant with EU rules.

- GBP: With Boris Johnson yesterday officially tipping his hat in for the race of the Tory leadership and the UK parliament rejecting a labor-backed bid to block a no-deal Brexit in a 309-298 vote, the cable saw quite a bit of volatility as the cable now trades back below the 1.27 handle. We could continue to see this elevated level of volatility as Carney is due to speak Friday, and we have the CPI figures and the BOE rate decision next week. To the upside we have a level in the region of 1.2750 and to the down side in the region of 1.26.

 

Economic Data

- (SE) Sweden May PES Unemployment Rate: 3.4% v 3.5% prior

- (NL) Netherlands May CPI M/M: -0.1% v +0.7% prior; Y/Y: 2.4% v 2.9% prior

- (NL) Netherlands May CPI EU Harmonized M/M: -0.3% v +1.1% prior; Y/Y: 2.3% V 2.6%e

- (FI) Finland Apr Final Retail Sales Volume Y/Y: 3.6% v 3.2% prelim

- (DE) Germany May Final CPI M/M: 0.2% v 0.2%e; Y/Y: 1.4% v 1.4%e

- (DE) Germany May Final CPI EU Harmonized M/M: 0.3% v 0.3%e; Y/Y: 1.3% v 1.3%e

- (CH) Swiss May Producer & Import Prices M/M: 0.0% v 0.1%e; Y/Y: -0.8% v -0.7%e

- (CH) Swiss National Bank (SNB) left the Sight Deposit Rate unchanged at -0.75% and maintained the 3-Month Libor Target Range between -1.25% to -0.25% range (both as expected). introduce a new a policy rate (to replace the target range as the future of Libor was not guaranteed)

- (SE) Sweden May Average House Prices (SEK): 2.927 v 3.021M prior

- (IT) Italy Q1 Unemployment Rate: 10.4% v 10.4%e

- (CZ) Czech Apr Current Account Balance (CZK): 17.7B v 20.0Be

- (EU) Euro Zone Apr Industrial Production M/M: -0.5% v -0.5%e; Y/Y: -0.4% v -0.6%e

- (GR) Greece Q1 Unemployment Rate: 19.2% v 18.7% prior

**Fixed Income Issuance**

- (IS) Iceland opened its book to sell €500M in 5-year notes; guidance seen high 30bps area to mid-swaps

- (SE) Sweden sold SEK345M in 0.125% Jun 2026 Inflation-linked bonds; Avg Yield: -2.1096 v -1.743% prior; Bid-to-cover: 2.35x v 5.09x prior

- (IE) Ireland Debt Agency (NTMA) sold €1.0B vs. €1.0B indicated in 1.1% May 2029 IGB bonds; Yield: 0.297% v 0.846%; Bid-to-cover: 2.7x v 2.2x prior

- (IT) Italy Debt Agency (Tesoro) sold €1.5B vs. €1.0-1.5B indicated range in 3.35% Mar 2035 BTP; Avg Yield: 2.87% v 3.00% prior; Bid-to-cover: 1.56x v 1.37x prior

 

Looking Ahead

- 05:30 (ZA) South Africa Apr Total Mining Production M/M: -0.5%e v +3.8% prior; Y/Y: -0.5%e v -1.1% prior; Gold Production Y/Y: No est v -17.7% prior; Platinum Production Y/: No est v -0.5% prior

- 05:30 (PL) Poland to sell Bonds

- 05:30 (HU) Hungary Debt Agency (AKK) to sell 12-month bills

- 06:00 (ZA) South Africa Q2 BER Business Confidence: 28e v 28 prior

- 06:00 (IE) Ireland May CPI M/M: No est v 0.4% prior; Y/Y: No est v 1.7% prior

- 06:00 (IE) Ireland May CPI EU Harmonized M/M: No est v 0.4% prior; Y/Y: No est v 1.7% prior

- 06:00 (IE) Ireland Apr Property Prices M/M: No est v 0.2% prior; Y/Y: No est v 3.9% prior

- (EU) Euro-area finance ministers (Eurogroup) meet in Luxembourg

- 06:40 OPEC Monthly Report

- 07:00 (FI) Finland Parliament no-confidence vote

- 08:00 (PL) Poland Apr Current Account Balance: €0.7Be v €0.5B prior; Trade Balance: €0.5Be v €0.6B prior; Exports: €19.5Be v €19.7B prior; Imports: €18.9Be v €1.9B prior

- 08:00 (BR) Brazil Apr IBGE Services Sector Volume Y/Y: -0.6%e v -2.3% prior

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

- 08:00 (UK) 1st round of Conservative Party Leadership vote (**Note: Each of the 10 candidates would need 17 votes in the 1st round to progress to next stage with further ballots due next week)

- 08:30 (US) May Import Price Index M/M: -0.2%e v +0.2% prior; Y/Y: -1.2%e v -0.2% prior; Export Price Index (ex-petroleum) M/M: -0.2%e v -0.6% prior

- 08:30 (US) May Export Price Index M/M: -0.2%e v +0.2% prior; Y/Y: No est v 0.3% prior

- 08:30 (US) Initial Jobless Claims: 215Ke v 218K prior; Continuing Claims: 1.67Me v 1.682M prior

- 08:30 (CA) Canada Apr New Housing Price Index M/M: 0.0%e v 0.0% prior; Y/Y: 0.1%e v 0.1% prior

- 09:00 (RU) Russia Gold and Forex Reserve w/e Jun 7th: No est v $495.2B prior

- 11:00 (US) Treasury announcement on 5-year TIPS reopening

- 11:30 (US) Treasury to sell 4-Week and 8-Week Bills

- 13:00 (US) Treasury to sell 30-Year Bonds Reopening

- 15:00 (AR) Argentina May National CPI M/M: 3.1%e v 3.4% prior; Y/Y: No est v 55.8% prior

- 07:00 (FI) Finland Parliament no-confidence vote

- 08:00 (PL) Poland Apr Current Account Balance: €0.7Be v €0.5B prior; Trade Balance: €0.5Be v €0.6B prior; Exports: €19.5Be v €19.7B prior; Imports: €18.9Be v €1.9B prior

- 08:00 (BR) Brazil Apr IBGE Services Sector Volume Y/Y: -0.6%e v -2.3% prior

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

- 08:00 (UK) 1st round of Conservative Party Leadership vote (**Note: Each of the 10 candidates would need 17 votes in the 1st round to progress to next stage with further ballots due next week)

- 08:30 (US) May Import Price Index M/M: -0.2%e v +0.2% prior; Y/Y: -1.2%e v -0.2% prior; Export Price Index (ex-petroleum) M/M: -0.2%e v -0.6% prior

- 08:30 (US) May Export Price Index M/M: -0.2%e v +0.2% prior; Y/Y: No est v 0.3% prior

- 08:30 (US) Initial Jobless Claims: 215Ke v 218K prior; Continuing Claims: 1.67Me v 1.682M prior

- 08:30 (CA) Canada Apr New Housing Price Index M/M: 0.0%e v 0.0% prior; Y/Y: 0.1%e v 0.1% prior

- 09:00 (RU) Russia Gold and Forex Reserve w/e Jun 7th: No est v $495.2B prior

- 11:00 (US) Treasury announcement on 5-year TIPS reopening

- 11:30 (US) Treasury to sell 4-Week and 8-Week Bills

- 13:00 (US) Treasury to sell 30-Year Bonds Reopening

- 15:00 (AR) Argentina May National CPI M/M: 3.1%e v 3.4% prior; Y/Y: No est v 55.8% prior

All information provided by Trade The News (a product of Trade The News, Inc. "referred to as TTN hereafter") is for informational purposes only. Information provided is not meant as investment advice nor is it a recommendation to Buy or Sell securities. Although information is taken from sources deemed reliable, no guarantees or assurances can be made to the accuracy of any information provided. 1. Information can be inaccurate and/or incomplete 2. Information can be mistakenly re-released or be delayed, 3. Information may be incorrect, misread, misinterpreted or misunderstood 4. Human error is a business risk you are willing to assume 5. Technology can crash or be interrupted without notice 6. Trading decisions are the responsibility of traders, not those providing additional information. Trade The News is not liable (financial and/or non-financial) for any losses that may arise from any information provided by TTN. Trading securities involves a high degree of risk, and financial losses can and do occur on a regular basis and are part of the risk of trading and investing.

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD: positive mood could prevent the collapse

The shared currency has remained under selling pressure on Friday, amid mounting speculation the ECB will announce a larger-than-anticipated stimulus package next September. EUR/USD capped by a Fibonacci resistance at 1.1110, yearly low at risk.

EUR/USD News

GBP/USD: economic disruption on a no-deal Brexit to weigh on Sterling

The GBP/USD pair has closed the week with gains, a handful of pips below the 1.2150 level. The Pound advanced for a third consecutive day, helped by some headlines indicating that Jeremy Corbyn, has been in talks with the Scottish National Party.

GBP/USD News

USD/JPY: short-term advance to be capped by long-term jitters

The USD/JPY has recovered some ground these last few days, to close the week at 106.35. Still, it posted a lower low and a lower high when compared to the previous week, as the Yen benefited from its safe-haven condition on mounting concerns about a US recession. 

USD/JPY News

Four Signs of A Bear Market

I am a believer that the Universe gives you signs. That may sound a bit crazy, but these three charts are three more signs of a bear market. The top chart is the GLD exchange traded fund.

Read more

Gold gives back territory towards a 23.6% retracement

Gold prices were a touch lower by the end of the week, falling -0.68% having travelled between a high of $1,528.00 to a low of $1,503.87, ending the NY session around $1,513. 

Gold News

Majors

Cryptocurrencies

Signatures