Monday session overlooked as upcoming US CPI takes focus

Notes/observations

- Subdued session across most assets with light volatility due to lack of catalysts.

- Select meme stocks bidding after the figurehead who triggered pandemic rally for GameStop posts on X for first time after 3 years.

- Oil is modestly higher as US PPI and CPI Apr approaches on Tues and Weds respectively. UK gilt yields decline ahead of unemployment and weekly earnings tomorrow.

- Asia closed mixed with NZX50 underperforming at -0.9%. EU indices are -0.1% to +0.3%. US futures are +0.1%. Gold -0.7%, DXY -0.1%; Commodity: Brent +0.2%, WTI +0.2%; Crypto: BTC +3.2%, ETH+2.2%.

Asia

- China Apr CPI Y/Y: 0.3% v 0.2%e v 0.1% prior; PPI Y/Y: -0.2% v -2.3%e v -2.8% prior.

- China Apr YTD Aggregate Financing (CNY): 12.7T v 13.809Te.

- China Apr YTD New Yuan Loans (CNY): 10.2T v 10.160Te.

- China Apr M2 Money Supply Y/Y: 7.2% v 8.3%e; M1 Money Supply Y/Y: -1.4% v +1.2%e first negative print since early 2022); M0 Money Supply Y/Y: 10.8% v 11.0% prior.

- New Zealand Q2 RBNZ Business Inflation Expectations Survey (2-year outlook): 2.33% v 2.50% prior (5th straight reading within target band and lowest since at least Q3 2021).

- Australia Apr NAB Business Confidence: 1 v 1 prior.

- China Credit growth to stabilize citing accelerated bond issuance [follows Apr bank lending data] – China Securities Journal.

- China plans to issue ultra-long Treasury bonds on Fri, May 17th and to complete the issuance by the end of Nov (NOTE: new bonds differ from normal government bonds in that the money raised is for targeted purposes).

- Australia Treasury said to see inflation possible slowing to RBA’s 2-3% target by end of 2024. Expected GDP growth to slow further over the coming years compared to December forecasts.

- Japan BOJ reduced 5-10-yr purchases by ¥50B in its outright buying ops, its first cut in this tenor since Dec 2023.

Global conflict/tensions

- Israel Security Cabinet last night approved the IDF's 'measured expansion' of the Rafah operation.

- US Sec of State Blinken: Israel lacked a "credible plan" to protect some 1.4M Palestinian civilians in Rafah. Warned an Israeli attack could create an insurgency by failing to kill all Hamas fighters in the southern Gaza city.

Europe

- Spain PM Sánchez’s Socialist Party won the biggest share of votes in Sunday’s regional election in Catalonia; separatist vote falls short.

Americas

- Biden Admin plans to quadruple tariffs on China EVs.

-US reportedly to raise concerns over China's AI development in upcoming talks in Geneva - press.

Energy

- Iraq Oil Min Ghani said not to agree to more OPEC+ production cuts. Believed Iraq had cut enough and would not agree to any other cut.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 -0.01% at 520.70, FTSE +0.04% at 8,437.00, DAX +0.11% at 18,777.25, CAC-40 -0.06% at 8,214.21, IBEX-35 -0.05% at 11,100.50, FTSE MIB +0.40% at 34,796.00, SMI -0.08% at 11,744.41, S&P 500 Futures +0.08%].

Market focal points/key themes: European indices open mixed and took on a downward bias in the early hours of trading; health care and real estate sectors among the better performers; among sectors trending lower are materials and utilities; EQT to take over OX2; earnings expected in the upcoming Americas session include Hochtief.

Equities

- Consumer discretionary: Ceconomy [CEC.DE] +1.5% (prelim results).

- Industrials: Diploma [DPLM.UK] +7.5% (earnings; raises outlook), John Wood [WG.UK] +1.0% (Sidara said to be considering an improved offer for Wood Group) - Technology: CompuGroup [COP.DE] -2.5% (analyst downgrade).

- Materials: Anglo American [AAL.UK] +0.5% (BHP and Anglo American CEOs due to meet each other and speak at the Bank of American Global Metals, Mining and Steel Conference on Tue), Salzgitter [SZG.DE] -1.0% (Q1 results, affirms guidance), K+S [SDF.DE] -2.0% (Q1 results, beat estimates, affirms guidance).

Speakers

- Turkey Fin Min Simsek commented that govt was taking all measures to tame inflation.

Currencies/fixed income

- FX markets were quiet and steady as a light economic calendar began the trading week. Dealers noted that it focused on central bank speak to scrutinize rate path outlook.

- EUR/USD continued to find resistance at the 1.08 level.

- GBP/USD at 1.2525 with focus on upcoming labor market data on Tuesday for the UK.

- USD/JPY continued to edge higher with 156 back in view. The 1600 area remains pivotal resistance and thought to be the line where Japanese officials would defend any further yen currency weakness.

Economic data

- (SE) Sweden SEB May Swedish Housing-Price Indicator: 48 v 39 prior.

- (FI) Finland Mar Current Account: -€1.1B v -€0.2B prior.

- (CZ) Czech Apr CPI M/M: 0.7% v 0.2%e; Y/Y: 2.9% v 2.4%e (moved back above target for 1st time in 3 months).

- (CZ) Czech Mar Export Price Index Y/Y: 0.1% v 1.6% prior; Import Price Index Y/Y: +1.8% v 1.6% prior.

- (TR) Turkey Mar Current Account Balance: -$4.5B v -$3.8Be.

- (TR) Turkey Mar Retail Sales Y/Y: 19.4% v 25.2% prior.

- (CH) Swiss Apr SECO Consumer Confidence: -38.1 v -38.0 prior.

- (CH) Swiss Weekly Total Sight Deposits (CHF): 468.9B v 473.2B prior; Domestic Sight Deposits: 460.3B v 461.5B prior.

Fixed income issuance

- None seen.

Looking ahead

- (RO) Romania Central Bank (NBR) Interest Rate Decision: Expected to cut Interest Rates by 25bps to 6.75%.

- (DE) Germany Mar Current Account Balance: No est v €29.8B prior.

- (MX) Mexico ANTAD Apr Same-Store Sales Y/Y: No est v 7.9% prior.

- (EU) European Finance Ministers (Eurogroup) in Brussels.

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

- 05:30 (DE) Germany to sell €3.0B in 12-month BuBills.

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

- 06:00 (PT) Portugal Q1 Labour Costs Y/Y: No est v 5.7% prior.

- 06:00 (PT) Portugal Apr Final CPI M/M: No est v 0.5% prelim; Y/Y: No est v 2.2% prelim.

- 06:00 (PT) Portugal Apr Final CPI EU Harmonized M/M: No est v 1.0% prelim; Y/Y: No est v 2.3% prelim.

- 06:00 (NO) Norway announcement on upcoming bond issuance (held on Wed).

- 06:00 (RO) Romania to sell combined RON in 2026 and 2034 bonds.

- 07:00 (CZ) Czech Central Bank to comment on CPI data.

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

- 07:30 (IS) Iceland to sell Bills.

- Sells ISK in 3-month bills; Avg Yield: % v 9.489% prior; Bid-to-cover: x v 1.42x prior.

- Sells ISK in 6-month bills; Avg Yield: % v 9.501% prior; Bid-to-cover: x v 1.48x prior.

- 08:00 (IN) India announces details of upcoming bond sale (held on Fridays).

- 08:00 (ES) Spain Debt Agency (Tesoro) announcement on upcoming issuance.

- 08:00 (IN) India Apr CPI Y/Y: 4.8%e v 4.9% prior.

- 08:00 (PL) Poland Central Bank (NBP) Apr Minutes (2 decisions ago).

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

- (RO) Romania Central Bank (NBR) Interest Rate Decision.

- 08:30 (CA) Canada Mar Building Permits M/M: -4.3%e v +9.3% prior.

- 09:00 (RU) Russia Gold & Forex Reserves w/e May 3rd: No est v $596.8B prior.

- 09:00 (US) Fed’s Mester.

- 09:00 (FR) France Debt Agency (AFT) to sell €5.9-7.1B in 3-month, 6-month and 12-month bills.

- 11:00 (US) NY Fed 1-year Inflation Expectations: No est v 3.0% prior.

- 11:30 (US) Treasury to sell 13-Week and 26-Week Bills.

- 12:45 (CH) SNB President Jordan.

- 16:00 (US) Weekly Crop Progress Report.

- 17:00 (KR) South Korea Apr Import Price Index M/M: No est v 0.4% prior; Y/Y: No est v -0.7% prior.

- 17:00 (KR) South Korea Apr Export Price Index M/M: No est v 0.4% prior; Y/Y: No est v 2.6% prior.

- 18:45 (NZ) New Zealand Apr Total Card Spending M/M: No est v 0.1% prior; Retail Card Spending M/M: No est v -0.7% prior.

- 18:45 (NZ) New Zealand Mar Net Migration : No est v 7.6K prior.

- 19:30 (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: No est v 80.5 prior.

- 19:50 (JP) Japan Apr PPI (Domestic CGPI) M/M: 0.3%e v 0.2% prior; Y/Y: 0.8%e v 0.8% prior.

- 21:00 (AU) Australia to sell 2040 bonds.

- 23:35 (JP) Japan to sell 5-Year JGB Bonds.