– Higher volatility as markets continued to be concerned about aggressive central bank policy tightening amid stubbornly high inflation.

– Analysts raise the prospect of Fed officials approving a 75bps rate hike this week.

– After two large sell-off days across global markets, negative sentiment takes a short break and consolidates ahead of critical FOMC rate decision tomorrow. Asia closed mixed with ASX200 underperforming at -3.55{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} while Shanghai climbs +1.0{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5}. In Europe, indices turn to the downside over the last hour with a slight rise in bond yields. US futures point to the up side. Elsewhere Gold -0.4{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5}, BTC -6.8{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5}, ETH -1.6{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5}, DXY -0.3{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5}, Brent +0.8{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5}, WTI +0.7{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5}.

-The sell-off was triggered by fresh fears of a surprise 75bps FOMC hike tomorrow, doubling down on global concerns that Central Banks are reactionary and not proactive in resolving the inflation crisis. Fears were flamed by China’s new Beijing outbreak arriving at a critical juncture and a crypto collapse instigated by Celsius freezing transactions. BTC has continued to fall to 22K while ETH has firmed up slightly.

– No surprises in economic data as Germany records elevated final CPI at 7.9{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5}. German ZEW survey showed an improvement in sentiment.

– UK job data in line with expectations as jobless claims reduce and unemployment comes in at 3.8{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5}.

– UK macro remains in focus throughout Europe as the EU is said to be relaunching legal action against the UK for violating Brexit terms. Speakers from all sides have been vocalizing opinions this morning. Domestically, PM Johnson appears to be resisting pressure to cut taxes as the economic outlook turns recessionary.


– Japan Fin Min Suzuki: Concerned about the rapid JPY currency (Yen) devaluation; Will take appropriate steps on FX if it is necessary. Monitoring FX with a greater sense of urgency.

– China Securities Journal reiterated belief that China had room to cut the RRR and interest rates, saw room to ease policy during H2 citing milder inflation and a return of capital inflows.

– ‘Many’ analysts expect the China PBOC to cut the MLF rate on Wed [Jun 15th].

– Shanghai Minhang district to again conduct mass coronavirus testing on Saturday, June 18th (prior was back on Jun 11th).


– UK Foreign Sec Truss (Brexit negotiator) confirm it sought to change the Northern Ireland protocol, not getting rid of it.

– EU’s Sefcovic stated that EU wanted to have a positive relationship with the UK but would not renegotiate the Northern Ireland protocol. Upholding the rule of law was imperative. EU to launch three separate lawsuits. Looking at options including drawing up a list of British goods Brussels could hit with trade tariffs.

– UK PM Johnson said to resists pressure to cut taxes as economy slumps closer towards recession. Putting a hold on cutting taxes for households in fear that it could feed soaring prices even further.

– ECB said to be increasingly determined not to divulge plans to tackle ‘fragmentation’ as it remained resolved to address bond market stress.


– Goldman Sachs now expected the FOMC to raise rates by 75bps during June and July meetings; Median rates at 3.25-3.5{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} end 2022.

– Bipartisan group of US lawmakers said to propose measure to screen outbound US investment in China and other countries on national security grounds.


– President Biden to travel to Saudi Arabia on July 15-16th to discuss energy.

Speakers/Fixed income/FX/Commodities/Erratum


Indices [Stoxx600 -0.05{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} at 412.32, FTSE +0.10{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} at 7,213.09, DAX -0.09{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} at 13,414.57, CAC-40 -0.49{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} at 5,992.72, IBEX-35 +0.40{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} at 8,216.25, FTSE MIB -0.23{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} at 21,867.00, SMI -0.75{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} at 10,814.60, S&P 500 Futures +0.59{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5}].

Market Focal Points/Key Themes: European indices open higher across the board but later slipped to trade generally mixed; better performing sectors include technology and financials; underperforming sectors include industrials and real estate; tech sector supported after better than anticipated results from Oracle yesterday; Atos divests certain assets, looking to split into two companies; Entain buys BetCity; no major US earnings expected in the upcoming session.


Consumer discretionary: Go-Ahead [GOG.UK] +14{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} (confirmed offer), Ashtead Group [AHT.UK] -2{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} (earnings), Air France-KLM [AF.FR] -9{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} (results of rights issue).

Healthcare: Morphosys [MOR.DE] +3{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} (collaboration).

Technology: Atos [ATO.FR] -18{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} (assets sale; CEO leaves; new structure).

Materials: Akzo Nobel [AKZA.NL] -5{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} (cuts outlook).


ECB’s Knot (Netherlands, hawk): ECB must raise rates by >25bps in Sept if conditions remained the same. He added that there was a real probability that rates to rise further in Oct and Dec (**Note: Initially reports circulated that Knot called for ECB must raise rates by >25bps in July (later corrected).

Austria govt announced package of measures to address rising cost of living. To cost approx €28B through 2026 (Offers €6.0B in inflation subsidies and €22B in tax changes).

Bank of Korea (BOK) May Minutes had various members note that pace of future rate hikes should be flexible to minimize impact on economic growth. BOK should preemptively respond to rate hikes abroad. Additional hikes were needed to reach the neutral area. Quelling inflation is the utmost priority.

Currencies/Fixed income

– USD maintained a firm tone ahead of Wed’s FOMC decision aided by higher bond yields. Markets now believing the Fed might enact rapid-fire hikes in the wake of an unexpectedly hot inflation reading. Various analysts now expect consecutive 75 basis point rate hikes.

– EUR/USD tested a 1-month low below the 1.04 level before stabilizing. pair approaching 1.05 after German ZEW survey showed an improvement in sentiment.

– GBP/USD at 1.2170 ahead of Thursday BOE decision. UK data in the session provided some hope that sharp rise in vacancies seen in 2H 2021 seems to be peaking. Dealers still debating whether BOE could hike by an aggressive 50bps this week.

– BOJ continued to defend its yield curve target as it increased its scheduled purchases of five-to-10-year debt after the benchmark yield climbed to 0.255{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} above the upper end of its 0.25{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} tolerance). In the end of the session BOJ purchased ¥2.2T through its fixed-rate operations (Record amount since such operations began in 2016).

Economic data

– (SE) Sweden May PES Unemployment Rate: 2.9{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} v 3.1{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} prior.

– (NL) Netherlands Apr Trade Balance: €4.1B v €4.8B prior.

– (FI) Finland May CPI M/M: {4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} v 0.3{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} prior; Y/Y: 7.0{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} v 5.7{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} prior.

(DE) Germany May Final CPI M/M: 0.9{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} v 0.9{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} prelim; Y/Y: 7.9{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} v 7.9{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} prelim.

– (DE) Germany May Final CPI EU Harmonized M/M: 1.1{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} v 1.1{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} prelim; Y/Y: 8.7{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} v 8.7{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} prelim.

– (DE) Germany May Wholesale Price Index M/M: 1.0{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} v 2.1{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} prior; Y/Y: 22.9{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} v 23.8{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} prior.

(UK) May Jobless Claims Change: -19.7K v -65.5K prior; Claimant Count Rate: 4.0{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} v 4.1{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} prior.

(UK) Apr Average Weekly Earnings 3M/Y: 6.8{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} v 7.4{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5}e; Weekly Earnings (ex-Bonus) 3M/Y: 4.2{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} v 4.0{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5}e.

(UK) Apr ILO Unemployment Rate: 3.8{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} v 3.6{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5}e; Employment Change 3M/3M: +177K v +83K prior.

(SE) Sweden May CPI M/M: 1.0{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} v 0.8{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5}e; Y/Y: 7.3{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} v 7.0{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5}e; CPI Level: 365.82 v 365.07e.

– (SE) Sweden May CPIF M/M: 1.0{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} v 0.8{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5}e; Y/Y: 7.2{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} v 7.0{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5}e.

– (SE) Sweden May CPIF (ex-energy) M/M: 0.9{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} v 0.7{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5}e; Y/Y: 5.4{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} v 5.2{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5}e.

– (IN) India May Wholesale Prices (WPI) Y/Y: 15.9{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} v 15.3{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5}e.

– (CZ) Czech Apr Current Account Balance (CZK): -10.2B v -15.0Be.

– (NO) Norway May Region Output Survey (past 3-months): 1.24 v 0.90 prior; Output Survey (next 6-months): 0.80 v 1.65 prior.

– (ZA) South Africa May Sacci Business Confidence: 89.3 v 95.6 prior.

– (HK) Hong Kong Q1 Industrial Production Y/Y: -1.2{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} v +5.8{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} prior.

– (HK) Hong Kong Q1 PPI Y/Y: 2.3{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} v 1.2{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} prior.

(DE) Germany Jun ZEW Current Situation Survey: -27.6 v -31.0e; Expectations Survey: -28.0 v -26.8e.

– (EU) Euro Zone Jun ZEW Expectations Survey: -28.0 v -29.5 prior.

Fixed income issuance

– (ID) Indonesia sold total IDR5.1T vs. IDR9.0T target in Islamic bills and bonds (sukuk).

– (EU) EFSF opened its book to sell EUR-denominated 10-year bonds via syndicate; guidance seen +1bp to mid-swaps.

– (ES) Spain Debt Agency (Tesoro) sold total €1.79B vs. €1.5-2.5B indicated range in 3-month and 9-month Bills.

– (NL) Netherlands Debt Agency (DSTA) guidance on Jan 2040 DSL bond revised to +35=38bps to July 2040 Bund (**Note: Issuance via DDA which is similar to syndicate).

Looking ahead

– (PT) Bank of Portugal May ECB financing to Portuguese Banks: No est v prior.

(IT) Italy Debt Agency (Tesoro) to sell €4.5-6.0B in 3-year, 7-year and 30-year BTP Bonds.

– OPEC Monthly Report.

– 05:25 (EU) Daily ECB Liquidity Stats.

05:30 (DE) Germany to sell €5.5B in 0{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} Jun 2024 Schatz.

– 05:30 (BE) Belgium Debt Agency (BDA) to sell €1.8-2.2B in 3-month and 12-month bills.

– 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 (ZA) South Africa to sell combined ZAR3.9B in 2035, 2040 and 2044 bonds.

– 06:00 (US) May NFIB Small Business Optimism Index: 93.0e v 93.2 prior.

– 06:00 (PT) Portugal May Final CPI M/M: No est v 1.0{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} prelim; Y/Y: No est v 8.0{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} prelim.

– 06:00 (PT) Portugal May Final CPI EU Harmonized M/M: No est v 1.0{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} prelim; Y/Y: No est v 8.1{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} prelim.

– 06:30 (EU) ESM cancelled planned 12-month Bill issuance.

– 07:00 (TR) Turkey to sell Bonds.

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

– 08:00 (BR) Brazil Apr IBGE Services Volume M/M: No est v 1.7{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} prior; Y/Y: No est v 11.4{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} prior.

– 08:30 (US) May PPI Final Demand M/M: 0.8{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5}e v 0.5{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} prior; Y/Y: 10.8{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5}e v 11.0{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} prior.

– 08:30 (US) May PPI Final (ex-food/energy) M/M: 0.6{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5}e v 0.4{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} prior; Y/Y: 8.6{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5}e v 8.8{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} prior.

– 08:30 (US) May PPI Final (ex-food/energy/trade) M/M: 0.5{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5}e v 0.6{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} prior; Y/Y: No est v 6.9{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} prior.

– 08:30 (CA) Canada Apr Manufacturing Sales M/M: No est v 2.5{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} prior; Wholesale Trade Sales M/M: No est v 0.3{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} prior.

– 08:55 (US) Weekly Redbook LFL Sales data.

– 09:00 (EU) Weekly ECB Forex Reserves.

– 09:00 (EU) ECB weekly QE bond buying update.

– 13:00 (DE) ECB’s Schnabel (Germany).

– 15:00 (AR) Argentina May National CPI M/M: 5.2{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5}e v 6.0{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} prior; Y/Y: 60.6{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5}e v 58.0{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} prior.

– 16:30 (US) Weekly API Oil Inventories.

– 18:45 (NZ) New Zealand Q1 Current Account (NZ$): -6.0Be v -7.3B prior; Current Account to GDP Ratio YTD: -6.5{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5}e v -5.8{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} prior.

– 19:00 (KR) South Korea May Unemployment Rate: 2.7{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5}e v 2.7{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} prior.

– 19:50 (JP) Japan Apr Core Machine Orders M/M: -1.3{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5}e v 7.1{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} prior; Y/Y: 5.2{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5}e v 7.6{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} prior.

– 20:30 (AU) Australia Jun Westpac Consumer Confidence: No est v 90.4 prior; M/M –No est v 5.6{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} prior.

– 21:10 (JP) BOJ to buy 1-3year, 3-5-year and 5-10-year.

– 22:00 (CN) China May Industrial Production Y/Y: -1.0{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5}e v -2.9{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} prior; YTD Y/Y: 3.1{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5}e 4.0{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} prior.

– 22:00 (CN) China May Retail Sales Y/Y: -7.1{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5}e v -11.1{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} prior; YTD Y/Y: -1.7{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5}e v -0.2{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} prior.

– 22:00 (CN) China May YTD Fixed Urban Assets Y/Y: 6.1{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5}e v 6.8{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} prior.

– 22:00 (CN) China May YTD Property Investment Y/Y: -4.0{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5}e v -2.7{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} prior.

– 22:00 (CN) China May Residential Property Sales YTD Y/Y: No est v -32.2{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} prior.

– 22:00 (CN) China May Surveyed Jobless Rate: 6.1{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5}e v 6.1{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} prior.

– 23:00 (KR) South Korea Apr M2 Money Supply M/M: No est v -0.1{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} prior; “L” Money Supply M/M: No est v 0.2{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} prior.

– 23:30 (JP) Japan to sell 12-Month Bills.


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