Notes/Observations

- UK May Retail Sales data misses consensus bring up concerns about a slowing economic recovery.

Asia:

- Japan May National CPI Y/Y: -0.1% v -0.2%e; CPI (ex-fresh food) Y/Y: 0.1% v 0.0%e first rise in core since Mar 2020).

- Bank of Japan (BOJ) left policy steady (as expected) with Interest Rate on Excess Reserves (IOER) unchanged at -0.10% and Yield Control (YCC) maintained at 0.00%.

Europe:

- ECB's Weidmann (Germany) noted that calls for the end of PEPP program to come soon, stressed that the program must end when pandemic was over.

- PM Johnson said to keep door open on easing lockdown measures two weeks early if data continued to improve. UK govt opened the door to ending restrictions on July 5th. Growing evidence that assumptions used by government scientists to justify delaying Freedom Day were too pessimistic.

Speakers/Fixed income/FX/Commodities/Erratum

Equities

Indices [Stoxx600 -0.21% at 458.36, FTSE -0.46% at 7,120.39, DAX -0.27% at 15,685.70, CAC-40 +0.08% at 6,671.65, IBEX-35 -0.60% at 9,141.00, FTSE MIB -0.30% at 25,635.50, SMI +0.31% at 12,048.73, S&P 500 Futures -0.04%].

Market Focal Points/Key Themes: European indices open mixed and failed to gain direction as the session progressed; better performing sectors include real estate and consumer discretionary; underperforming sectors include materials and financials; Nippon Steel sells stake in Acerinox; Kerry sells its consumer foods division to Pilgim’s Pride; federal holiday in the US to keep news flow muted; no major earnings expected during the upcoming US session.

Equities

- Consumer discretionary: Inchcape [INCH.UK] +3% (trading update), Tesco [TSCO.UK] -2% (earnings).

- Consumer staples: Danone [BN.FR] -1% (divestment).

- Healthcare: Orphazyme [ORPHA.DK] -70% (FDA's letter; profit warning).

- Industrials: Alstom [ALO.FR] +2% (contract).

Speakers

- Turkey Fin Min Elvan stated that would not give up on 5% inflation target for short-term gains.

- BOJ Gov Kuroda post rate decision press conference noted that corporate financing would likely to remain under stress and take a while for the pandemic to subside. Reiterated its overall economic assessment that domestic economy was picking up as a trend; uncertainty remained due to pandemic. Exports had continued to increase steadily. Inflation expectations were moving sideways with core CPI seen around zero (0%) in the near term. Reiterated stance that would not hesitate to ease if needed. Climate change had the ability to impact the economy greatly; govt should lead policy on issue.

- China FX Regulator SAFE official noted that two-way CNY (Yuan) price fluctuation was seen as the norm. Reiterated stance to keep foreign exchange market stable.

- China said to be considering full abandonment of birth restrictions by 2025.

- China Foreign Ministry spokesperson Zhao Lijian noted that the Korean Peninsula was facing new tensions. Had no information any possible Biden-Xi talks.

Currencies/Fixed Income

- USD holding onto to it post FOMC gains after the hawkish Fed outlook. Greenback higher by 1.5% this week as short positions were covered after Fed projected possible rate hikes in 2023.

- GBP/USD fell to 6-week lows of 1.3855 after UK May Retail Sales data missed expectations. The data miss brought up fresh concerns about a slowing economic recovery coupled with a surge in virus cases (11K reported on Thursday).

Economic data

- (DE) Germany May PPI M/M: 1.5% v 0.7%e; Y/Y: 7.2% v 6.4%e.

- (UK) May Retail Sales (ex-auto/fuel) M/M: -2.1% v +1.4%e; Y/Y: 21.7% v 27.1%e.

- (UK) May Retail Sales (including auto/fuel) M/M: -1.4% v +1.5%e; Y/Y: 24.6% v 29.3%e.

- (FR) France Q1 Final Wages Q/Q: 0.6% v 0.5% prelim.

- (CN) Weekly Shanghai copper inventories (SHFE): 172.5K v 181.0K tons prior.

- (RU) Russia Narrow Money Supply w/e Jun 11th (RUB): 14.14T v 14.04T prior.

- (EU) Euro Zone Apr Current Account: €22.8B v €17.8B prior.

- (PL) Poland May Employment M/M: 0.3% v 0.2%e; Y/Y: 2.7% v 2.5%e.

- (PL) Poland May Average Gross Wages M/M: -2.9% v -2.8%e; Y/Y: 10.1% v 10.4%e.

- (UK) BoE/GfK May Inflation Next 12 Months: 2.4% v 2.7% prior.

- (IT) Italy Apr Current Account Balance: €6.7B v €3.1B prior.

- (GR) Greece Apr Current Account Balance: -€2.1B v -€1.5B prior.

- (PT) Portugal Apr Current Account Balance: -€0.6B v €0B prior (flat).

Fixed income Issuance

- None seen.

Looking Ahead

- (EU) Daily ECB Liquidity Stats.

- 05:30 (IN) India to sell combined INR320B in 2026, 2033, 2035 and 2050 bonds.

- 05:30 (ZA) South Africa to sell combined ZAR2.0B in I/L2033, 2038 and 2050 Bonds.

- 06:00 (PT) Portugal May PPI M/M: No est v 1.5% prior; Y/Y: No est v 4.9% 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 (IN) India announces upcoming bill issuance (held on Wed.

- 07:00 (MX) Mexico Q1 Aggregate Supply and Demand: -2.5%e v -5.1% prior.

- 07:30 (IN) India Weekly Forex Reserve w/e Jun 11th: No est v $605.0B prior.

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

- 11:00 (EU) Potential sovereign ratings after European close (Fitch on UK, Slovenia sovereign ratings; Moody’s on Luxembourg, Slovakia sovereign ratings).

- 12:00 (CO) Colombia Apr Economic Activity Index (Monthly GDP) Y/Y: 30%e v 11.8% prior.

- 13:00 (US) Weekly Baker Hughes Rig Count.

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