Various EU inflation data above ECB target level

Notes/Observations

- CPI reading from Spain and Germany saw the YoY above ECB target level.

- Various German States saw their May inflation data registered its biggest increase since fall 2018 mainly due to the base effect from higher energy prices.

- China PBoC takes action to curb recent CNY currency strength.

- US and UK markets closed for holidays.

Asia:

- China May Manufacturing PMI (Govt Official) registered its 14th month of expansion (51.0 v 51.1e).

- China PBOC sets the Yuan reference rate at 6.3682 for its strongest fixing since mid-May 2018).

- Former China PBOC official Sheng Songcheng said 'fast' yuan appreciation probably will not last, suggests the Yuan is 'overbought'; says the rise in CNY suggests short-term speculation.

- RBNZ Assistant Gov Hawkesby stated that inflation was not seen reaching sustainable levels until the latter end of RBNZ Projections. He added that projections of rate hike in late 2022 was conditional on the economy.

- Japan Apr Retail sales missed expectations (M/M: -4.5% v -1.7%e; Y/Y: 12.0% v 15.2%e).

- Japan Apr Preliminary Industrial Production missed expectation (M/M: 2.5% v 3.9%e; Y/Y: 15.4% v 16.9%e).

- Japan May Consumer Confidence 34.1 v 33.0e.

Europe:

- German State Audit Office noted that a planned reform of EZ’s bailout fund would pose substantial risks for Germany’s state budget. It believed that if the ESM ran out of its own money in a banking crisis then the German States would have to pay.

- BOE said to have has hired head-hunters to help look for a replacement for Chief Economist Haldane with talk that its looking overseas for a high profile candidate (Reminder: Haldane will step down from Bank of England role after June meeting).

Mid-East:

- Israel Opposition parties said to have reached a deal to form a govt.

Speakers/Fixed income/FX/Commodities/Erratum

Equities

Indices [Stoxx600 -0.04% at 448.82, FTSE +0.04% at 7,022.61, DAX -0.25% at 15,481.05, CAC-40 +0.08% at 6,489.07, IBEX-35 -0.28% at 9,199.00, FTSE MIB +0.32% at 25,249.50, SMI +0.01% at 11,427.04 , S&P 500 Futures +0.03%].

Market Focal Points/Key Themes:

Equities

European indices trade mixed, slightly changed across the board amid relatively quiet session following US/UK holidays; better-performing sectors include consumer discretionary and technology; Societa Cattolica di Assicurazioni in Milan trade sharply higher following Generali’s offer; SSAB’s CFO steps down to join Epiroc Group in Norway. Bitcoin and other cryptocurrencies trade mostly up on a d/d basis amid a press report that US regulators signal a bigger role in the cryptocurrencies market.

- Financials: Societa Cattolica di Assicurazioni [CASS.IT] +12% (offer).

- Healthcare: Oriola [OKDAV.FI] +2% (divests stake).

- Industrials: SSAB [SSABA.SE] -1% (CFO steps down).

Speakers

- ECB's Visco (Italy) stated that a large and persistent rise in interest rates that were not justified by economic prospects to be countered with full use of the ECB bond-buying program. Financing conditions needed to remain supportive as the medium-term inflation trend remained weak and recovery was fragile.

- France Fin Min Le Maire reiterated the stance that 2021 GDP growth forecast seen at 5.0%; expects budget deficit at 9.4% of GDP.

- Austria Debt Agency (AFFA) raised its 2021 total debt issuance from €65B to between €65-70. Raised the bond issuance from €40B to €45B.

- Poland Central Bank's Hardt noted that the MPC should consider a 'symbolic' rate rise soon.

- OECD chief Gurria noted that a final global tax agreement could come in October.

- China PBOC said to have raised its Forex Reserve Requirement for financial institutions by 200 bps to 7%; effective June 15th.

- China Politburo to hold a major meeting on optimizing natalist policies and how to deal with an aging population. China to allow three children per couple.

Currencies/Fixed Income

- FX markets were steady in holiday-induced trading despite a plethora of EU inflation data showing CPI above the ECB target of around 2%
EUR/USD well contained within recent ranges and holding below the 1.22 area.

- China PBoC took action to curb recent CNY currency strength as the PBOC raised its Forex Reserve Requirement for financial institutions by 200 bps to 7.0% to be effective from mid-Jun.

Economic data

- (NL) Netherlands Apr Retail Sales Y/Y: 10.2% v 8.2% prior.

- (DE) Germany May CPI North Rhine Westphalia M/M: 0.5% v 0.6% prior; Y/Y: 2.6% v 2.1% prior.

- (FI) Finland Mar Final Trade Balance: -€0.3B v -€0.3B prior.

- (DK) Denmark Q1 Preliminary GDP Q/Q: -1.3% v +0.8% prior; Y/Y: -1.3%e v -1.4% prior.

- (DK) Denmark Apr Gross Unemployment Rate: 4.6% v 4.5% prior; Unemployment Rate (seasonally adj): 4.2% v 4.1% prior.

- (NO) Norway Apr Credit Indicator Growth Y/Y: 5.0% v 5.0% prior.

- (ZA) South Africa Apr M3 Money Supply Y/Y: 2.0 v 3.6% prior; Private Sector Credit Y/Y: -1.8% v -0.8%e.

- (ES) Spain May Preliminary CPI M/M: 0.4% v 0.2%e; Y/Y: 2.7% v 2.4%e.

- (ES) Spain May Preliminary CPI EU Harmonized M/M: 0.5% v 0.5%e; Y/Y: 2.4% v 2.4%e.

- (AT) Austria Q1 Final GDP Q/Q: -1.1% v +0.2% prelim.

- (TR) Turkey Q1 GDP Q/Q: 1.7% v 1.3%e; Y/Y: 7.0% v 6.3%e.

- (HU) Hungary Apr PPI M/M: 0.6% v 1.9% prior; Y/Y: 9.8% v 9.6% prior.

- (TH) Thailand Apr Current Account Balance: -$1.3B v -$1.6Be; Overall Balance of Payments (BOP): +$0.3B v -$5.2B prior; Trade Account Balance: $2.4B v $3.4B prior; Exports Y/Y: 19.1% v 15.8% prior; Imports Y/Y: 25.9% v 15.1% prior.

- (SE) Sweden Mar Non-Manual Workers Wages Y/Y: 2.3% v 2.1% prior.

- (EU) Euro Zone Apr M3 Money Supply Y/Y: 9.2% v 9.6%e.

- (DE) Germany May CPI Brandenburg M/M: 0.4% v 0.7% prior; Y/Y: 2.6% v 2.2% prior.

- (DE) Germany May CPI Hesse M/M: 0.6% v 0.7% prior; Y/Y: 2.5% v 1.9% prior.

- (DE) Germany May CPI Bavaria M/M: 0.5% v 0.6% prior; Y/Y: 2.6% v 2.0% prior.

- (ES) Spain Mar Current Account: -€0.2B v -€1.7B prior.

- (CH) Swiss weekly Total Sight Deposits (CHF): 710.5B v 709.6B prior; Domestic Sight Deposits: 634.6B v 635.1B prior.

- (NO) Norway Central Bank (Norges) Jun Bank Daily FX Purchases (NOK): -1.7B v -1.8B prior.

- (PL) Poland Q1 Final GDP Q/Q: 1.1% v 0.9% prelim; Y/Y: -0.9% v -1.2% prelim.

- (CZ) Czech Apr M2 Money Supply Y/Y: 10.9% v 10.9% prior.

- (DE) Germany May CPI Saxony M/M: 0.4% v 0.8% prior; Y/Y: 2.4% v 2.2% prior.

- (BE) Belgium Q1 Final GDP Q/Q: 1.0% v 0.6% prelim; Y/Y: -0.6% v -1.0% prelim.

- (IT) Italy May Preliminary CPI M/M: 0.0% v 0.2%e; Y/Y: 1.3% v 1.5%e.

- (IT) Italy May Preliminary CPI EU Harmonized M/M: 0.0% v 0.1%e; Y/Y: 1.3% v 1.4%e.

- (GR) Greece Mar Retail Sales Value Y/Y: -0.9% v -2.8% prior; Retail Sales Volume Y/Y: -3.0% v -3.0% prior.

- (IS) Iceland Q1 GDP Q/Q: -5.2% v +4.8% prior; Y/Y: -1.7% v -5.1% prior.

- (IS) Iceland Apr Final Trade Balance (ISK): -11.2B v -6.9B prelim.

Fixed income Issuance

- (NO) Norway sold NOK2.0B vs. NOK2.0B indicated in 6-month bills; Avg Yield: 0.12% v 0.22% prior; Bid-to-cover: 2.13x v 2.36x prior.

Looking Ahead

- Opec+ JMMC technical Panel meeting.

- (PT) Portugal May Preliminary CPI M/M: No est v 0.4% prior; Y/Y: No est v 0.6% prior.

- (PT) Portugal May Preliminary CPI EU Harmonized M/M: No est v 0.5% prior; Y/Y: No est v -0.1% prior.

- 05:20 (EU) Daily ECB Liquidity Stats.

- 05:30 (BE) Belgium Debt Agency (BDA) to sell €2.9-3.4B in 2025, 2031, and 2050 OLO Bonds.

- 05:30 (ZA) South Africa announces details of upcoming I/L bond sale (held on Fridays).

- 06:00 (IL) Israel Apr Chain Store Sales M/M: No est v 4.5% prior.

- 06:00 (PT) Portugal Q1 Final GDP Q/Q: No est v -3.3% prelim; Y/Y: No est v -5.4% prelim.

- 06:00 (IL) Israel to sell bonds.

- 06:00 (RO) Romania to sell Bonds; Avg Yield: % v % prior; bid-to-cover: x v x prior.

- 06:30 (IN) India Mar Fiscal Deficit (INR): No est v 1.715T prior.

- 06:45 (US) Daily Libor Fixing.

- 07:25 (BR) Brazil Central Bank Weekly Economists Survey.

- 08:00 (IN) India Q1 GDP Y/Y: 1.0%e v 0.4% prior; GVA Y/Y: No est v 1.0% prior.

- 08:00 (IN) India 2021 GDP Annual Estimate Y/Y: -7.5%e v -8.0% prior.

- 08:00 (IN) India Apr Eight (key) Infrastructure Industries: No est v 6.8% prior.

- 08:00 (DE) Germany May Preliminary CPI M/M: 0.3%e v 0.7% prior; Y/Y: 2.3%e v 2.0% prior.

- 08:00 (DE) Germany May Preliminary CPI EU Harmonized M/M: 0.3%e v 0.5% prior; Y/Y: 2.3%e v 2.1% prior.

- 08:00 (ZA) South Africa Apr Trade Balance (ZAR): 37.5Be v 52.8B prior.

- 08:00 (UK) No Daily Baltic Dry Bulk Index (UK Holiday).

- 08:00 (ES) Spain Debt Agency (Tesoro) announces details of upcoming issuance.

- 08:30 (CA) Canada Apr Industrial Product Price M/M: 1.7%e v 1.6% prior; Raw Materials Price Index M/M: 1.7%e v 2.3% prior.

- 08:30 (CA) Canada Q1 Current Account Balance: +$2.5Be v -$7.3B prior.

- 08:30 (BR) Brazil Apr Primary Budget Balance (BRL): 17.2Be v 5.0B prior; Nominal Budget Balance: -1.3Be v -44.5B prior; Net Debt to GDP Ratio: 61.4%e v 61.3% prior.

- 09:00 (FR) France Debt Agency (AFT) to sell €5.3-6.5B in 3-month, 6-month and 12-month bills.

- 09:00 (IL) Israel Central Bank (BOI) Interest Rate Decision Expected to leave Base Rate unchanged at 0.10%.

- 09:00 (CL) Chile Apr Unemployment Rate: 10.5%e v 10.4% prior.

- 09:00 (CL) Chile Apr Retail Sales Y/Y: 45.0%e v 23.8% prior; Commercial Activity Y/Y: No est v 18.3% prior.

- 09:00 (CL) Chile Apr Manufacturing Production Y/Y: 7.0%e v 3.9% prior; Industrial Production Y/Y: No est v 2.9% prior; Total Copper Production: No est v 491.7K tons prior.

- 09:45 (EU) ECB weekly QE bond-buying update.

- 10:00 (MX) Mexico Apr Net Outstanding Loans (MXN): No est v 4.586T prior.

- 11:00 (CO) Colombia Apr National Unemployment Rate: No est v 14.2% prior; Urban Unemployment Rate: 16.4%e v 16.8% prior.

- 11:00 (CO) Colombia Apr Exports: $3.2Be v $3.3B prior.

- 18:30 (AU) Australia May Performance of Manufacturing Index: No est v 61.7 prior.

- 18:45 (NZ) New Zealand Apr Building Permits M/M: No est v 17.9% prior.

- 19:00 (AU) Australia May Final PMI Manufacturing: No est v 59.9 prelim.

- 19:30 (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: No est v # prior.

- 19:50 (JP) Japan Q1 Capital Spending Y/Y: -6.8%e v -4.8% prior; Capital Spending (ex-software) Y/Y: -7.6%e v -6.1% prior.

- 19:50 (JP) Japan Q1 Company Profits Y/Y: No est v -0.7% prior; Company Sales Y/Y: No est v -4.5% prior.

- 20:00 (KR) South Korea May Trade Balance: $3.8Be v $0.4B prior; Exports Y/Y: 48.9 %e v 41.1% prior; Imports Y/Y: 38.0%e v 33.9% prior.

- 20:00 (AU) Australia May CoreLogic House Price Index M/M: No est v 1.8% prior.

- 20:01 (IE) Ireland May PMI Manufacturing: No est v 60.8 prior.

- 20:30 (JP) Japan May Final PMI Manufacturing: No est v 52.5 prelim.

- 20:30 (KR) South Korea May PMI Manufacturing: No est v 54.6 prior.

- 20:30 (TW) Taiwan May PMI Manufacturing: No est v 62.4 prior.

- 20:30 (MY) Malaysia May PMI Manufacturing: No est v 53.9 prior.

- 20:30 (TH) Thailand May PMI Manufacturing: No est v 50.7 prior.

- 20:30 (PH) Philippines May PMI Manufacturing: No est v 49.0 prior.

- 20:30 (VN) Vietnam May PMI Manufacturing: No est v 54.7 prior.

- 21:30 (AU) Australia Q1 Current Account Balance: A$17.7Be v A$14.5B prior.

- 21:30 (AU) Australia Apr Building Approvals M/M: -10.0%e v +17.4% prior.

- 21:45 (CN) China May Caixin PMI Manufacturing: 52.0e v 51.9 prior.

- 23:30 (HK) Hong Kong to sell 3-month and 6-month bills.