Clashing Economic Data Drives Choppy Trading

Economic Data

- (DE) Germany May Preliminary CPI M/M: 0.1% v 0.1%e; Y/Y: 0.7% v 0.7%e
- (US) Apr Personal Income: 0.4% v 0.3%e; Personal Spending: 0.0% v 0.2%e
- (US) Apr PCE Deflator M/M: 0.0% v 0.1%e; Y/Y: 0.1% v 0.2%e
- (US) Apr PCE Core M/M: 0.1% v 0.2%e; Y/Y: 1.2% v 1.3%e
- (BE) Belgium Q1 Final GDP Q/Q: 0.3% v 0.3% prelim; Y/Y: 0.9% v 0.9% prelim
- (BR) Brazil May Manufacturing PMI: 45.9 v 46.0 prior
- (MX) Mexico Apr Leading Indicators M/M: -0.08 v -0.09 prior
- (CA) Canada May RBC Manufacturing PMI: 49.8 v 49.0 prior
- (US) May Final Markit Manufacturing PMI: 54.0 v 54.1e
- (US) Apr Construction Spending M/M: +2.2% v +0.7%e
- (US) May ISM Manufacturing: 52.8 v 52.0e; Prices Paid: 49.5 v 43.0e
- (MX) Mexico Apr Total Remittances: $2.01B v $2.3B prior
- (MX) Mexico May Manufacturing PMI: 53.3 v 53.8 prior

After a choppy morning, US stocks are flat and the 10-year yield is up four basis points to 2.16%. The economic data has been a mixed bag, and spurious Greece rumors have once again taken traders on a bit of a wild goose chase. As of writing, the DJIA and the S&P500 are up 0.02% each, and the Nasdaq is up 0.04%.

In line with recent strong homebuilding industry data, the April construction spending reading jumped 2.2% to its highest level since November 2008. The percent increase was the largest since May 2012. The May ISM manufacturing index rose to 52.8 from April's reading of 51.5, while the new orders index rose to its highest level since December. Analysts note that the pace of manufacturing expansion seen in the ISM numbers is still well below the levels seen last summer (in Aug 2014, the index rose to 58.1). On a less positive note, the April core PCE data was flat and missed expectations, while April personal spending was flat, slipping lower from the March reading. 

Contrasting US and European data has made for choppy FX trading this morning. EUR/USD rose from lows just above 1.0890 after positive signs of growth in German May CPI to 1.0980 after the US PCE and spending data. The pair turned around after the ISM and construction spending numbers, dropping right back to 1.0890. USD/JPY is breaking out to fresh 13-year highs, around 124.66 mid-morning. 

Another weekend has passed and Greece is still not saved. There were reports that the IMF told Greece it could bundle the €1.6 billion in payments it owes in June into one lump sum, pushing the hard deadline for a potential default to the end of June. The payments are currently spread across four instalments, with the first €300 million due this Friday. That buys Greece some time, but doesn't make the actual payments any easier. 

The American Society of Clinical Oncology (ASCO) annual meeting took place in Chicago this weekend. One of the biggest winners is ImmunoGen, with shares up 70% after it presented good data supporting its IMGN853 "smart bomb" cancer drug delivery technology. Oncothyreon is up 20% after its ONT-380 breast cancer data impressed. PBYI, CLDX and CLVS saw early losses today on some less impressive data, although CLDX is back in the green presently.

Altera agreed to be acquired by Intel for $16.7 billion in stock and cash, in a deal valued at $54 a share, a premium of 11% over Altera's closing share price on Friday and a 56% premium from March 26, the day before the possibility of a transaction was first reported. In other deal news, Humana is still up 20% after Friday's reports that company is considering selling itself, despite CNBC's Faber pouring some cold water on the news. This morning, Faber said no deal is imminent and any agreement is weeks away.

Looking Ahead

- 12:00 (FR) France Apr Net Change Jobseekers: 0.0Ke v +15.4K prior; Total Jobseekers: 3.51Me v 3.510M prior
- 12:00 (IT) Italy May New Car Registrations Y/Y: No est v 24.2% prior
- 12:00 (IT) Italy May Budget Balance: No est v -€6.0B prior
- 13:00 (MX) Mexico May IMEF Manufacturing Index: No est v 51.4 prior; Non-Manufacturing Index: No est v 51.3 prior
- 14:00 (BR) Brazil May Trade Balance: No est v $0.5B prior; Total Exports: No est v $15.2B prior; Total Imports: No est v $14.7B prior
- 19:00 (KR) South Korea Apr Current Account Balance: No est v $10.4B prior; Balance of Payment Balance (BOP): No est v $11.2B prior
- 19:00 (KR) South Korea May CPI M/M: No est v 0.1% prior; Y/Y: No est v 0.4% prior; CPI Core Y/Y: No est v 2.0%prior
- 19:50 (JP) Japan May Monetary Base: No est v ¥305.9T prior; Y/Y: No est v 35.2% prior
- 21:30 (JP) Japan Apr Labor Cash Earnings Y/Y: No est v 0.0% prior (revised from 0.1%); Real Cash Earnings Y/Y: No est v -2.7% prior (revised from -2.6%)

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