ON DECK FOR MONDAY, APRIL 29
KEY POINTS:
- Bonds richen, USD softens to start an action-packed week
- Softer than expected start to tracking Eurozone inflation pushes yields a little lower
- The yen’s wild night was driven by intervention speculation
- Global Week Ahead reminder
As a reminder, please see the Global Week Ahead — Too Early to Cut, Too Late to Hike here in full publication format. No slide deck this time due to travel. Key topics:
- FOMC’s prior lack of a killer instinct…
- …lessens its ability to fight inflation now
- The Fed has other options to explore…
- …before courting massive risks with added hikes
- Nonfarm will be part of a suite of US job market readings
- Tracking Canada’s economic rebound
- Eurozone inflation may face upside risk ahead of key June meeting
- Eurozone GDP will also inform the path to June
- China’s PMIs are likely to signal modest growth
- BanRep likely to cut again
- Norges may have less confidence in an autumn cut
- Will Swiss CPI embolden another SNB cut?
- Is NZ wage growth still too hot for the RBNZ?
- Mexico’s soft economy poised for an update
- OECD to update forecasts
- Global macro
Bonds are richening on the back of the first glimpses at April CPI readings in the Eurozone, but it’s a pretty dull start to what is going to be an active week for macro risk.
Sovereign yields are down by 2–5bps across countries and maturities. Stocks are mixed with N.A. futures up a bit along with London’s cash market while the rest of Europe is doing very little.
The dollar is a touch softer this morning with the biggest mover being the yen that started the Asian overnight session dipping toward 160 to the USD before suddenly bouncing back toward about 155.80 now. The suddenness of the move just after midnight ET spawned intervention speculation. If so, then good luck to them, as intervention typically yields fleeting effects against more fundamental forces.
German states released CPI prints for April that point to the national reading doing no worse than consensus estimates and possibly a smidge better. Four out of six states reported 0.6% m/m for headline CPI, one landed at 0.4% and the other at 0.3%. Consensus had expected 0.6% for the national reading that arrives at 8am.
Spanish CPI rose by 0.7% m/m in April (1% consensus) with the EU-harmonized reading at 0.6% (0.7% consensus). Core CPI fell to 2.9% y/y (3.3% prior, 3.2% consensus). Chart 1.
The Eurozone add-up plus estimates from France and Italy arrive tomorrow. We get one more round of Eurozone inflation readings on May 31st before the June 6th ECB meeting.
There are no material releases on tap in either Canada or the US today.
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