The Morning Hark - 14 June 2024
Today’s focus...The week looking to go out with a whimper but at least Euro24 starts.
Overnight Highlights
Prices are at 6.30 BST/1.30 EST, with changes reflecting movement from midnight GMT
Oil - Oil unchanged in Asia with Brent and Crude August futures currently at 82.40 and 78, bang on our open yesterday once again.
EQ - Asian equity markets mixed with the Hang Seng down smalls with the futures currently at 17,965. Meanwhile the Nikkei futures trading up close to one percent at 38,865 after the unchanged BoJ.
The US indicies unchanged with the S&P and Nasdaq futures now at 5440 and 19,635 respectively.
Gold - Gold unchanged in Asia with the August futures trading currently at 2320.
FI - US yields recovering overnight, after the sell off post PPI yesterday, with the US2y futures trading at 4.72% whilst the US10y futures yield at 4.26%.
European yields a touch lower with the German 10y closing at 2.48% and the Italian 10y yield at 3.95%. Expect a rebound today.
UK gilt 10y at 4.13%.
FX - The USD up modestly in Asia with the USD Index currently at 105.34 and back above the CPI level. The majors now trading at; JPY, EUR and GBP 158, 1.0740 and 1.2750 respectively. The main USD strength coming through the JPY axis again after the BoJ dull fest.
Today’s major FX option expiries we have an eclectic mix; USDCAD has $1.7bn at 1.3760 and $0.8bn at 1.38. In the AUD we have AUD2bn between 0.6620/00. EURGBP has €1.3bn at 0.8440.
Others - Bitcoin and Ethereum remaining on the back foot with the pair currently at 66,780 and 3504 respectively.
Macro Themes At Play
Recap
EU Industrial Production for April was not too rosey with a downside miss to -0.1% for the MoM taking the YoY to -3%.
US PPI Report for May was a “oops…mind the gap” with the MoM headline coming in at -0.2% sharply down on April’s spike higher and well below expectations. YoY also well below expectations to 2.2%. Core wise the MoM had a similar them with a below estimated flat reading taking the YoY a smidgeon lower to 2.3%.
Central Bank Speakers
ECB’s Vasle felt that wage momentum was still relatively strong. However more 2024 cuts are probable if the baseline scenario holds and if it does more are likely next year too.
Mueller insisted that the eCB had not yet met its inflation target as services inflation is still relatively high. It is also possible that inflation could temporarily rise again. Too early to say then the next rate cut will be.
The Day Ahead
The BoJ Rate Decision pretty much as expected. No change to rates, which was a unanimous decision, and the BoJ will layout their plans for the bond tapering at the meeting next month. Nakamura voted against the bond tapering plan. Governor Ueda will be up soon with his “preceding cautiously” narrative no doubt.
As we go to print the Swedish Inflation Report for May.
Little else on other than the Michigan Survey with he inflation expectations and a good number of central bank speakers.
👏 If you found this briefing helpful, please show the desk some appreciation by giving it a ‘Like’ or a ‘Comment’ at the bottom of the page.
Stay on top of the latest market narratives throughout the day using our curated research & commentary channels on Harkster.com
Main Highlights Ahead
All times in BST (EST+5 / CET-1 / JST-9)
The main highlights for the day ahead ahead in terms of data and speakers:
Friday
Sweden Inflation Rate MoM May consensus -0.1% vs previous 0.3% (07.00 BST)
Sweden Inflation Rate YoY May consensus 3.5% vs previous 3.9% (07.00 BST)
Sweden CPIF MoM May consensus -0.1% vs previous 0.3% (07.00 BST)
Sweden CPIF YoY May consensus 2.1% vs previous 2.3% (07.00 BST)
US Michigan Consumer Sentiment Prel June consensus 72 vs previous 69.1 (15.00 BST)
US Michigan Consumer Expectations Prel June consensus 70 vs previous 68.8 (15.00 BST)
US Michigan 1y Inflation Expectations Prel June consensus % vs previous 3.3% (15.00 BST)
US Michigan 5y Inflation Expectations Prel June consensus % vs previous 3% (15.00 BST)
Fed Speakers
Goolsbee (19.00 BST)
ECB Speakers
Lane (10.00 BST)
de Guindos (10.00 BST)
Schnabel (14.30 BST)
Lagarde (18.30 BST)
Good luck and a good weekend to one and all.
The information provided in this post is for general information purposes only. No information, materials, services, and other content provided in this post constitute solicitation, recommendation, endorsement or any financial, investment, or other advice. Seek independent professional consultation in the form of legal, financial, and fiscal advice before making any investment decision.