Norway Jun Core CPI registered another record high

Notes/observations

- Quiet morning EU session for news lets markets prepare for week ahead, with NATO summit, US CPI and beginning of US bank earnings.

- Norway Jun Core CPI hit a record level at 7.0% YoY, above 6.6% estimate.

- In European politics, Netherlands govt collapsed following dispute over immigration policy. PM to step down, election to be held in the fall.

- Geo-politically, NATO leader summit begins in Lithuania tomorrow with focus on Sweden’s accession bid, as well as military support for Ukraine and progress on its long-term aim for joining NATO. Expecting Germany to announce a military package for Ukraine later today (following US cluster munition support on Fri).

- US Jun CPI and Bank of Canada (BOC) rate decision on Wed (July 12th), with some seeing BoC as a leading indicator for Fed policy. Ahead of US CPI current CME Fed futures price in 8% chance for a pause and 92% for 25bps hike.

- US banks to start Q2 earnings season at the end of the week, with sources indicating they will report largest loan losses since the pandemic.

- Asia closed mixed with Nikkei225 under-performing at -0.6%. EU indices are +0.1-0.5%. US futures are -0.1% to -0.4%. Gold -0.1%, DXY +0.1%; Commodity: Brent -0.8%, WTI -0.9%, TTF -3.0%; Crypto: BTC -0.8%, ETH -0.8%.

Asia

- China Jun CPI registered its slowest annual pace since Feb 2021 (M/M: -0.2% v -0.2% prior; Y/Y: 0.0% v 0.2%e.

- China MOF issued statement for US Treasury Sec Yellen's trip and noted China had asked US to take practical actions in response to China's major concerns about the US economic sanctions and slowdown.

- BOJ offered ¥1.0T in Repo Operations from July 10th (**Note: 1st such operation since Mar 2022). Announcement came after interbank borrowing costs have climbed.

- Bank of Japan (BOJ) quarterly Regional Economic Report (Sakura) raised the assessment for 3 of 9 regions while maintaining the assessment for 6 of 9 regions.

- New Zealand Institute of Economic Research (NZIER): Most Shadow Board members recommend the Reserve Bank should keep the Official Cash Rate (OCR) at 5.50% in the upcoming July Monetary Policy Review.One member recommended a 25-basis point increase, reflecting the view that inflation is sticky.

- Australia RBA's Asst Gov Luci Ellis to leave central bank and become Westpac's chief economist.

Ukraine conflict

- President Biden stated that did not think that there was a unanimous view in NATO about bringing Ukraine into the alliance amid an active war.

Europe

- ECB’s Villeroy (France) stated that ECB would soon reach high point of interest rates; Had passed the peak in inflation in France.

- ECB's Centeno (Portugal, dove): Confident inflation had peaked and quickly receding; Suggested underlying price growth would follow with a lag.

- BOE Gov Bailey said to have rejected requests to raise inflation target over current 2% level. Warned that changing it could damage BOE’s credibility.

- UK Chancellor of the Exchequer (Fin Min) Hunt said to rule out a pre-election tax cut this autumn. Would not countenance tax cuts if they madee the battle against inflation harder.

- Netherlands coalition govt has collapsed due to dispute over tougher immigration/asylum policy.

Americas

- US Treasury Sec Yellen statement following her four day China visit noted that talks put ties between the two countries on 'surer footing'.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 +0.13% at 448.24, FTSE +0.18% at 7,270.35, DAX +0.32% at 15,653.42, CAC-40 +0.42% at 7,140.64, IBEX-35 +0.35% at 9,281.10, FTSE MIB +0.38% at 27,884.00, SMI +0.44% at 10,922.90, S&P 500 Futures -0.14%].

Market focal points/Key themes: European indices open generally lower, but then mostly cut losses to trade slightly higher; Oil & Gas sector and Food & Beverage sectors are among outperformers, while Tech and Basic Resources are generally underperforming others so far; On corporate front, share price of Beter Bed Holding almost doubled in Amsterdam following takeover offer; Plus500 in London trade higher about 3%, while BT Group shares slightly lower on CEO succession plan; no US earners expected during upcoming morning.

Equities

- Consumer discretionary: Beter Bed Holding [BBED.NL] +95% (to be acquired), Scout24 (G24.DE) -5.0% (cut to Neutral at UBS).

- Consumer staples: Pernod Ricard [RI.FR] -1.0% (cut to Hold at HSBC), Safilo [SFL.IT] +1.0% (new CFO).

- Materials: SES-imagotag [SESL.FR] +2.5% (again rejects short-seller allegations).

- Energy: TGS [TGS.NO] -14.0% (prelim Q2).

- Financials: Plus500 [PLUS.UK] +3.0% (trading update).

- Healthcare: Nicox [COX.FR] +13.0% (estimates potential annual global net sales for NCX 470), Nanobiotix [NANO.FR] +46.5% (license agreement for NBTXR3), Bayer [BAYN.DE] +2.0% (considers spin off of crop science unit - post close Fri; reiterated with Neutral at JPMorgan).

- Industrials: Rheinmetall [RHE.DE] +1.0% (Germany said to make 'very significant' announcement on weapons deliveries to Ukraine during NATO summit).

- Technology: Infineon [IFX.DE] -1.0% (TSMC monthly sales).

- Telecom: BT Group [BT.A.UK] -1.0% (CEO succession plan).

Speakers

- Sweden Central Bank (Riksbank) Jun Minutes noted that it might need to tighten policy more than forecast. Although CPIF inflation had continued to fall since Apr meeting, it remained far too high from the 2% target. Some members noted that the risk of inflation becoming entrenched at too high a level had increase.

- Netherlands interim PM Rutte confirmed that he would not run for fifth term in office following collapse of govt over weekend; To leave politics.

- Poland Central Bank (NBP) Quarterly Inflation Report cut the 2023 GDP growth forecast from 0.9% to 0.6% while raising the 2024 GDP growth forecast from 2.1% to 2.4%. Poland maintained the 2023 CPI forecast at 11.9% while cutting the 2024 CPI forecast from 5.7% to 5.2%.

- Poland Central Bank (NBP) Kotecki stated that was too early to discuss any rate cuts in Sept or Oct period.

- Indonesia Central Bank (BI) Dep Gov Damayanti stated that the IDR currency (rupiah) has room to appreciate against the USD.

Currencies/fixed income

- USD was trying to rebound following the softer-than-expected jobs data from Friday. Dealers noted that details in the employment report reflected persistently strong wage growth, pointing to still-tight labor market conditions. Focus turns to the US CPI print set for release on Wed.

- EUR/USD at 1.0950 area aided by higher yields in the region as ECB members continued to stress that the tightening cycle was not yet over.

- USD/JPY at 142.30.

- The Chinese Yuan was softer in the session following disappointing inflation data that added to concerns over the Chinese economy. Pair tested above 7.2330 area.

Economic data

- (SE) Sweden Jun SEB Swedish Housing-Price Indicator: 14 v 18 prior.

- (NL) Netherlands May Manufacturing Production M/M: +1.2 v -3.2% prior; Y/Y: -9.2% v -12.2% prior; Industrial Sales Y/Y: -6.5%v -8.5% prior.

- (FI) Finland May Industrial Production M/M: +2.5% v -2.1% prior; Y/Y: +1.7% v -3.2% prior.

- (NO) Norway Jun CPI M/M: 0.6% v 0.5% prior; Y/Y: 6.4 % v 6.3%e.

- (NO) Norway Jun CPI Underlying M/M: 0.9% v 0.7% prior; Y/Y: 7.0% v 6.6%e.

- (NO) Norway Jun PPI (including oil) M/M: +0.3% v -8.3% prior; Y/Y: % v -23.5% prior.

- (DK) Denmark Jun CPI M/M: % v -1.4% prior; Y/Y: % v 2.9% prior.

- (DK) Denmark Jun CPI EU Harmonized M/M: % v -1.5% prior; Y/Y: -28.5% v 2.9% prior.

- (DK) Denmark May Current Account Balance (DKK): 25.0B v 32.2B prior; Trade Balance (ex-shipping): 9.1B v 9.0B prior.

- (HU) Hungary May Preliminary Trade Balance: €1.1B v €0.4B prior.

- (CZ) Czech May Retail Sales (ex-auto) Y/Y: -6.1% v -6.2%e.

- (TR) Turkey May Unemployment Rate: 9.5% v 10.0% prior.

- (AT) Austria May Industrial Production M/M: % v 0.9% prior; Y/Y: % v 1.0% prior.

- (CH) Swiss weekly Total Sight Deposits (CHF): 486.6B v 491.6B prior; Domestic Sight Deposits: 476.0B v 480.2B prior.

- (CZ) Czech Jun International Reserves: $141.3B v $136.0B prior.

- (EU) Euro Zone July Sentix Investor Confidence: -22.5 v -17.9e.

- (IS) Iceland Jun Preliminary Trade Balance (ISK): -43.1B v -34.1B prior.

- (GR) Greece May Industrial Production Y/Y: 1.4% v 4.1% prior.

- (HU) Hungary Jun YTD Budget Balance (HUF): 2.896T v -2.763T prior.

Fixed income issuance

- None seen.

Looking ahead

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

- 05:30 ((DE) Germany to sell €5.0B in 6-month BuBills.

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

- 06:00 (IE) Ireland May Industrial Production M/M: No est v 21.4% prior; Y/Y: No est v 27.4% prior.

- 06:00 (PT) Portugal May Trade Balance: No est v -€2.2B prior.

- 06:00 (IS) Israel Jun Consumer Confidence: No est v 80 prior.

- 06:00 (IL) Israel to sell ILS1.15B in 2029, 2031, 2032 and 2052 bonds.

- 06:45 (US) Daily Libor Fixing.

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

- 08:00 (IS) Iceland Jun Unemployment Rate: No est v 3.0% prior.

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

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

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

- 08:30 (CA) Canada May Building Permits M/M: No est v -18.8% prior.

- 08:30 (CL) Chile Central Bank Traders Survey.

- 08:30 (UR) Ukraine Jun CPI M/M: 1.8%e v 0.5% prior; Y/Y: 13.6%e v 15.3% prior.

- 09:00 (FR) France Debt Agency (AFT) to sell €4.6-5.8B 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 4.75%.

- 10:00 (US) May Final Wholesale Inventories M/M: -0.1%e v -0.1% prelim; Wholesale Trade Sales M/M: 0.3%e v 0.2% prior.

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

- 15:00 (US) May Consumer Credit: $20.0Be v $23.0B prior.

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

- 18:45 (NZ) New Zealand Jun Total Card Spending M/M: No est v -1.9% prior; Retail Card Spending M/M: No est v -1.7% prior.

- 19:00 (CO) Colombia Jun CPI M/M: 0.4%e v 0.4% prior; Y/Y: 12.3%e v 12.4% prior.

- 19:00 (CO) Colombia Jun CPI Core M/M: No est v 0.8% prior; Y/Y: No est v 11.6% prior.

- 19:01 (UK) Jun BRC LFL Sales Y/Y: No est v 3.7% prior.

- 19:15 (AU) Australia Jun CBA Household Spending M/M: No est v 3.1% prior; Y/Y: No est v 4.7% prior.

- 19:30 (AU) Australia ANZ/Roy Morgan Weekly Consumer Confidence: No est v 74.1 prior.

- 19:50 (JP) Japan Jun M2 Money Supply Y/Y: No est v 2.1% prior; M3 Money Supply Y/Y: No est v 2.7% prior.

- 20:30 (AU) Australia July Westpac Consumer Confidence: No est v 79.2 prior.

- 21:00 (PH) Philippines May Trade Balance: -$4.6Be v -$4.5B prior; Exports Y/Y: -15.0%e v -20.2% prior; Imports Y/Y: -16.6%e v -17.7% prior.

- 21:30 (AU) Australia Jun NAB Business Confidence: No est v -4 prior; Business Conditions: No est v 8 prior.

- 23:35 (JP) Japan to sell 5-year JGB bonds.