Euro Zone Inflation Data Remains Subdued


  • Month-end and quarter-end keeping price action subdued
  • UK Q1 GDP revised lower in final reading to register its largest contraction since Q3 1979
  • Various EU inflation data shows a long way for ECB to get back to target
  • Focus continues on various coronavirus hotspots. Australian 2nd largest state (Victoria) imposed a partial lockdown amid a resurgence in coronavirus infections
  • Markets continue weigh economic recovery hopes versus risk of rising virus infection


  • China Legislature (NPC) unanimously passed Hong Kong Security Law (as expected)
  • China Jun Manufacturing PMI (Govt Official): 50.9 v 50.5e (4th straight month of expansion)
  • Japan May Jobless Rate: 2.9% v 2.8%e v 2.6% prior
  • Japan May Preliminary Industrial Production M/M: -8.4% v -5.9%e; Y/Y: -25.9% v -23.1%e
  • RBA Dep Gov Debelle reiterated was prepared to scale bond purchase if needed; June quarter (Q2) GDP better than originally feared. Reiterated view that saw no need for negative rates with current situation
  • RBNZ Chief Economist Yuong Ha stated that risks to economy remained to the downside and keeping all options open


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  • Total global cases 10,278,458 (+1.6% d/d); death toll 504.9K (+0.7% d/d)
  • Australia Victoria State Premier: Certain suburbs in Melbourne will be under a 1-month stay at home order after report of 64 additional coronavirus cases (2 month high)


  • ECB’s Largarde: ECB constantly evaluated policy for proportionality, confident German court matter could be addressed
  • German Bundestag said to have concluded ECB had fulfilled constitutional court requirement for proportionality with its stimulus program


  • US Sec of Commerce Ross announced after China NPC passed the HK Security Law that regulations affording preferential treatment to Hong Kong were now suspended.
  • US said to have ended defense exports to Hong Kong and was also restricting HK’s access to high-technology products (dual-use technologies)
  • Fed’s Powell prepared testimony for House Financial Services Committee hearing was released overnight. Powell noted that the path for US economy was extraordinarily uncertain and depended on health response to the pandemic. The economy had entered important new phase sooner than expected. Full recovery was unlikely if people didnot feel safe; outlook also dependent on government relief to support recovery for as long as necessary



  • Indices [Stoxx600 -0.27% at 358.92, FTSE -0.87% at 6,172.02, DAX -0.14% at 12,215.05, CAC-40 -0.34% at 4,928.46, IBEX-35 -0.70% at 7,227.00, FTSE MIB -0.84% at 19,284.50, SMI -0.14% at 10,045.92, S&P 500 Futures -0.46%]
  • Market Focal Points/Key Themes: European indices open modestly higher across the board, but later turned around with all indices trading down; better performing sectors include industrials and materials; energy and healthcare sectors underperforming; Shell provides update on medium-term price expectations; Reportedly ThyssenKrupp considering merger of steel unit with SSAB; French FinMin sees no privatization of ADP until at least 2022; earnings expected in the upcoming US session include FedEx, International Paper and ConAgra


  • Consumer discretionary: Smiths Group [SMIN.UK] +7% (trading update), Cineworld [CINE.UK] +5% (cinemas reopen), Staffline Group [STAF.UK] -4% (earnings)
  • Industrials: Thyssenkrupp [TKA.DE] +1.5% (merger speculation), Varta [VAR1.DE] +6% (funding), SAS [SAS.SE] -7% (recapitilization plan)
  • Technology: Wirecard [WDI.DE] +180% (UK Financial Conduct Authority allows Wirecard UK unit to resume trading)


  • German Association of Chambers of Trade and Industry (DIHK): V-shaped recovery was unlikely
  • Poland Central Bank member Zyzynski: Rebound in inflation was seen as temporary; too early to say when interest rates would rise
  • Japan Dep PM Aso: Snap election in autumn was preferable
  • China Foreign Ministry spokesperson Zhao Lijoan stated that China rejected the new US restriction on Hong Kong exports adding that such intimidation tactics would not work. China to take the necessary measures to safeguard sovereignty

Currencies/Fixed Income

  • Month-end and quarter-end flows kept FX price action subdued.
  • EUR/USD remained on the defensive as various EU inflation data showed that deflation remained a concern in the region. Pair at 1.1210 area by mid-session.
  • GBP remained on soft footing after Q1 GDP data registered its largest contraction since the late 1970s. Also concerns about the lack of progress in UK.-EU talks was another headwind. Markets noting that UK PM Johnson likely to announce plans for infrastructure investment on Tuesday to help boost growth prospects. GBP/USD lower by 0.3% to test 1.2265 in session
  • USD/JPY was higher by 0.1%. The monthly announcement by the BOJ on QE bond buying set up to buy more short-end debt in July to help steepen the JGB yield curve.

Economic Data

  • (NL) Netherlands May Retail Sales Y/Y: 6.5 v 0.4% prior
  • (FI) Finland May House Price Index M/M: -0.4% v +0.3% prior; Y/Y: -1.1% v -0.2% prior
  • (UK) Q1 Final GDP Q/Q: -2.2% v -2.0%e; Y/Y: -1.7% v -1.6%e
  • (UK) Q1 Final Private Consumption Q/Q: -2.9% v -1.7%e; Government Spending Q/Q: -4.1% v -2.6%e; Gross Fixed Capital Formation Q/Q: -1.1% v -1.0%e; Exports Q/Q: -13.5% v -12.2%e; Imports Q/Q: -9.4% v -9.4%e
  • (UK) Q1 Final Total Business Investment Q/Q: -0.3% v 0.0%e; Y/Y: 0.8% v 0.7%e
  • (UK) Q1 Current Account: -£21.1B v -£15.0Be
  • (FI) Finland Apr Final Trade Balance: €0.1B v €0.2B prelim
  • (NO) Norway May Credit Indicator Growth Y/Y: 4.6% v 4.6% prior
  • (DK) Denmark Q1 Final GDP Q/Q: -2.0% v -2.1% prelim Y/Y: -0.2% v -0.3% prelim
  • (DK) Denmark May Unemployment Rate (Seasonally Adj): 5.4% v 5.1% prior; Gross Unemployment Rate: 5.6% v 5.4% prior
  • (ZA) South Africa May M3 Money Supply Y/Y: 10.3% v 10.3%e; Private Sector Credit Y/Y: 6.4% v 7.4%
  • (CH) Swiss May Real Retail Sales Y/Y: +6.6% v -18.8% prior
  • (FR) France Jun Preliminary CPI M/M: -0.1% v +0.3%e; Y/Y: 0.1% v 0.4%e
  • (FR) France Jun Preliminary CPI EU Harmonized M/M: -0.1% v +0.3%e; Y/Y: 0.1% v 0.5%e
  • (FR) France May PPI M/M: -0.1% v -2.9% prior; Y/Y: -4.1% v -4.5% prior
  • (FR) France May Consumer Spending M/M: 36.6% v 30.0%e; Y/Y: -8.3% v -13.5%e
  • (ES) Spain Q1 Final GDP Q/Q: -5.2% v -5.2%e; Y/Y: -4.1% v -4.1%e
  • (CH) Swiss Jun KOF Leading Indicator: 59.4 v 77.0e
  • (TR) Turkey May Trade Balance: -3.4$B v -$3.4Be
  • (HU) Hungary May PPI M/M: -1.4% v +0.4% prior; Y/Y: 1.7% v 3.7% prior
  • (AT) Austria May PPI M/M: -0.5% v -0.8% prior; Y/Y: -2.7% v -2.4% prior
  • (CZ) Czech Q1 Final GDP (3nd reading) Q/Q: -3.4% v -3.3% prelim; Y/Y: -2.0% v -2.0% prelim
  • (HU) Hungary Apr Average Gross Wages Y/Y: 7.8%% v 9.0% prior
  • (SE) Sweden Apr Wages Non-Manual Workers Y/Y: 1.8% v 2.9% prior
  • (TH) Thailand May Current Account Balance: +$0.1B v -$0.6Be; Overall Balance (BOP): $1.1B v $6.3B prior; Trade Account Balance: $3.2B v $2.5B prior; Exports Y/Y: -23.6% v -3.3% prior; Imports Y/Y: -34.2% v -17.0% prior
  • (ES) Spain Apr Current Account Balance: -€1.5B v -€0.3B prior
  • (PL) Poland Jun Preliminary CPI M/M: 0.7% v 0.3%e; Y/Y: 3.3% v 2.8%e
  • (NO) Norway Central Bank (Norges) July Daily FX Purchases (NOK): -2.5B v -2.3B prior
  • (CZ) Czech May M2 Money Supply Y/Y: 8.9% v 9.3% prior
  • (HK) Hong Kong May Retail Sales Value Y/Y: -32.8% v -31.8%e; Retail Sales Volume Y/Y: -33.9% v -33.7%e
  • (PT) Portugal Jun Preliminary CPI M/M: +0.9% v -0.4% prior; Y/Y: +0.2% v -0.7% prior
  • (PT) Portugal Jun Preliminary CPI EU Harmonized M/M: +1.3% v -0.2% prior; Y/Y: +0.3% v -0.6% prior
  • (EU) Euro Zone Jun Advance CPI Estimate Y/Y: 0.3% v 0.2%e; CPI Core Y/Y: 0.8% v 0.8%e; CPI M/M: 0.3% v 0.2%e
  • (IT) Italy Jun Preliminary CPI M/M: 0.1% v 0.1%e; Y/Y: -0.2% v -0.2%e
  • (IT) Italy Jun Preliminary CPI EU Harmonized M/M: 0.0% v 0.1%e; Y/Y: -0.4% v -0.3%e
  • (GR) Greece Apr Retail Sales Value Y/Y: -24.8% v -3.1% prior; Retail Sales Volume Y/Y: -24.7% v -1.5% prior
  • (IS) Iceland May Final Trade Balance (ISK): 1.8B v 1.7B prelim

Fixed Income Issuance

  • (IT) Italy Debt Agency (Tesoro) solds total €6.5B vs. €5.0-6.5B indicated range in 5-year and 10-year BTP bonds
  • Sold €3.0B vs. €2.5-3.0B indicated range in 1.85% July 2025 BTP bonds; Avg Yield: 0.68% v 0.91% prior; Bid-to-cover: 1.31x v 1.40x prior
  • Sold €1.292B in 0.95% Aug 2030 BTP; Avg Yield: 1.20% v 1.42% prior; Bid-to-cover: 2.07x (highest since 2012) v 1.27x prior
  • Sold €2.208B in 1.65% Dec 2030 BTP; Avg Yield: 1.28% 1.707% syndicate; bid-to-cover: 1.60x
  • (IT) Italy Debt Agency (Tesoro) sold €1.25B vs. €0.75-1.25B indicated range in Dec 2023 floating rate bonds (CCTeu); Avg Yield: 0.56% v 0.53% prior; Bid-to-cover: 1.74x v 1.67x prior

Looking Ahead

  • 05:30 (ZA) South Africa Q1 GDP Annualized Q/Q: -4.0%e v -1.4% prior; Y/Y: -0.8%e v -0.5% prior
  • 05:30 (SL) Sri Lanka Jun CPI Y/Y: 3.6%e v 4.0% prior
  • 05:30 (IT) Italy May PPI M/M: No est v -3.4% prior; Y/Y: No est v -6.7% prior
  • 05:30 (HU) Hungary Debt Agency (AKK) to sell 3-Month Bills
  • 05:30 (EU) ECB allotment in 7-Day Main Refinancing Tender (MRO
  • 05:30 (DE) Germany to sell €3.0B in 0.00% Nov 2027 Bunds
  • 05:30 (ZA) South Africa to sell combined ZAR6.1B in 2026, 2030 and 2035 bonds
  • 05:40 (UK) BOE weekly allotment in 6-month GBP-enhanced liquidity repo operation (ILTR)
  • 06:00 (PT) Portugal May Industrial Production M/M: No est -18.2% prior; Y/Y: No est -25.9%prior
  • 06:00 (IE) Ireland Jun Unemployment Rate: No est v 5.6% prior
  • 06:00 (UK) BOE’s Haskel
  • 06:45 (US) Daily Libor Fixing
  • 07:00 (DE) ECB’s Schnabel (Germany) at IIF event
  • 07:00 (MX) Mexico Apr Gold Production: No est v 6.6K kilograms prior; Silver Production: No est v 312.4K kilograms prior; Copper Production: No est v 42.0K tons
  • 07:30 (IN) India May Eight Infrastructure (Key) Industries Y/Y: No est v -38.1% prior
  • 07:45 (US) Goldman Economist Chain Store Sales
  • 07:45 (UK) BOE to buy £1.15B in APF Gilt purchase operation (3-7 years)
  • 08:00 (BR) Brazil May National Unemployment Rate: 13.1%e v 12.6% prior
  • 08:00 (ZA) South Africa May Trade Balance (ZAR): -.98Be v -35.0B prior
  • 08:00 (ZA) South Africa May Monthly Budget Balance (ZAR): -51.4Be v -51.2B prior
  • 08:00 (UK) Daily Baltic Dry Bulk Index
  • 08:30 (CA) Canada Apr GDP M/M: -11.8%e v -7.2% prior; Y/Y: -16.9%e v -5.8% prior
  • 08:30 (BR) Brazil May Primary Budget Balance (BRL): -135.0Be v -94.3B prior; Nominal Budget Balance (BRL): -159.1Be v -115.8B prior; Net Debt to GDP Ratio: 54.6%e v 52.7% prior
  • 08:30 (CL) Chile Central Bank Traders Survey
  • 08:45 (UK) BOE to buy £1.15B in APF Gilt purchase operation (7-20 years)
  • 08:55 (US) Weekly Redbook LFL Sales data
  • 09:00 (US) Apr S&P/Case Shiller Home Price Index (20- City) M/M: 0.50%e v 0.47% prior; Y/Y: 3.70%e v 3.92% prior; house Price Index (HPI): No est v 222.21 prior;
  • 09:00 (US) S&P Apr Case-Shiller (overall) Y/Y: 4.50%e v 4.35% prior; House Price Index (HPI): No est v 214.96 prior
  • 09:00 (RU) Russia Q1 Final Current Account Balance: No est v $21.7B prelim
  • 09:00 (CL) Chile May Retail Sales Y/Y: No est v -31.3% prior; Commercial Activity Y/Y: No est v-24.7% prior
  • 09:00 (CL) Chile May Unemployment Rate: 9.8%e v 9.0% prior
  • 09:00 (CL) Chile May Industrial Production Y/Y: No est v -3.8% prior; Manufacturing Production Y/Y: No est v -5.9% prior; Total Copper Production: No est v 474.9K prior
  • 09:00 (EU) Weekly ECB Forex Reserves
  • 09:00 (RU) Russia announcement on upcoming OFZ bond issuance (held on Wed)
  • 09:45 (US) Jun Chicago Purchasing Managers Index PMI: 44.0e v 32.3 prior
  • 09:45 (UK) BOE to buy £1.15B in APF Gilt purchase operation (20+ years)
  • 10:00 (US) Jun Consumer Confidence: 90.5e v 86.6 prior
  • 10:00 (MX) Mexico May Net Outstanding Loans (MXN): No est v 5.07T prior
  • 10:00 (MX) Weekly Mexico International Reserve data
  • 10:00 (UK) BOE’s Cunliffe
  • 11:00 (CO) Colombia Apr National Unemployment Rate: No est v 19.8% prior; Urban Unemployment Rate: 23.0%e v 23.5% prior
  • 11:00 (US) Fed’s Williams
  • 11:00 (ES) ECB’s De Guindos (Spain) – 12;30 (US) Fed Chief Powell before House financial panel
  • 12:00 (US) USDA Quarterly Grain Stocks Report
  • 13:00 (NZ) New Zealand May QV House Prices Y/Y: No est v 7.7% prior
  • 14:00 (CO) Colombia Central Bank
  • 15:00 (US) May Agricultural Prices Paid: No est v -2.3% prior; Agriculture Prices Received: No est v -9.4% prior
  • 15:00 (AR) Argentina Q1 Current Account: No est v $2.9B prior
  • 15:00 (AR) Argentina Apr Wages M/M: No est v 3.0% prior
  • 16:30 (US) Weekly API Oil Inventories
  • 18:30 (AU) (AU) Australia Jun AiG Perf of Manufacturing Index: No est v 41.6 prior
  • 18:45 (NZ) New Zealand Building Permits M/M: No est v -6.5% prior
  • 19:00 (AU) Australia Jun Final Manufacturing PMI: No est v 49.8 prelim
  • 19:01 (UK) Jun BRC Shop Price Index Y/Y: No est v -2.4% prior
  • 19:50 (JP) Japan Q2 Tankan Large Manufacturing Index: -31e v -8 prior; Outlook Index: -24e v -11 prior
  • 19:50 (JP) Japan Q2 Tankan Large Non-Manufacturing Index: -20e v +8 prior; Outlook Index: -15e v -11 prior; All Industry Capex: 1.3%e v 1.8% prior
  • 19:50 (JP) Japan Q2 Tankan Small Manufacturers Index: -39e v -15 prior; Outlook Index: -36e v -29 prior
  • 19:50 (JP) Japan Q2 Tankan Small Non-Manufacturers Index: -32e v -1 prior; Outlook Index: -30e v -19 prior
  • 19:50 (JP) Japan May Loans and Discounts Corp y/y: No est v 5.1% prior
  • 20:00 (AU) Australia Jun CoreLogic House Prices M/M: -0.5 prior
  • 20:00 (KR) KR) South Korea May Trade Balance: $4.1Be v $0.4B prior; Exports Y/Y: -8.7%e v -23.6% prior (revised from -23.7%); Imports Y/Y -10.1%e v -21.0% prior (revised from -21.1%)
  • 20:01 (IE) Ireland Jun PMI Manufacturing: No est v 39.2 prior
  • 20:30 (VN) Vietnam Jun PMI Manufacturing: No est v 42.7 prior
  • 20:30 (MY) Malaysia Jun PMI Manufacturing: No est v 45.6 prior
  • 20:30 (ID) Indonesia Jun PMI Manufacturing: No est v 28.6 prior
  • 20:30 (KR) South Korea Jun PMI Manufacturing: No est v 41.3 prior
  • 20:30 (PH) Philippines Jun PMI Manufacturing: No est v 40.1 prior
  • 20:30 (TH) Thailand Jun PMI Manufacturing: No est v 41.6 prior
  • 20:30 (TA) Taiwan Jun PMI Manufacturing: No est v 41.9 prior
  • 20:30 (SG) Singapore Q2 Private Home Prices Q/Q: No est v -1.0% prior
  • 20:30 (JP) Japan Jun Final PMI Manufacturing: No est v 37.8 prelim
  • 21:30 (AU) Australia May Building Approvals M/M: -7.8%e v -1.8% prior
  • 21:30 (AU) Australia May Private Sector Houses M/M: No est v 2.7% prior
  • 21:45 (CN) China Jun Caixin PMI Manufacturing: 50.5e v 50.7 prior
  • 23:00 (CN) China to sell 3-year and 7-year Upsized Government Bonds

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