| ON DECK FOR MONDAY, MAY 6 |
KEY POINTS:
- Light macro risk, Tokyo, London and Seoul shut
- Oil edges higher on Middle East tensions
- EGBs rally on ECB speak
- Fed’s credit conditions survey update on tap
It’s a very quiet start to the week with little by way of macro calendar-based risk to consider and market holidays in parts of the world. The UK is out for a bank holiday. Japan and South Korea are shut for Children’s Day. US Treasury trading starts at 7amET today as a result of the holidays elsewhere. Stocks are a little higher across most exchanges that are open. EGBs are richening. The yen resumed weakening after recent interventions.
There were no material releases overnight. It’s possible that the market moves to start the week are a carryover from Friday’s reaction to US payrolls (recap here). China’s composite private PMI was little changed at 52.8. The Eurozone composite PMI was revised slightly higher in April (51.7, up from 51.4 initially).
Oil prices are moving higher by about 1% across WTI and Brent probably due to flaring tensions in the Middle East. Israel warned Gazans in Rafah to evacuate ahead of “extreme force against terrorist organizations” following the break down of talks with Hamas and a rocket attack by Hamas over the weekend.
Central bank speak is focused upon the ECB and Fed. The ECB’s Chief Economist said he had more confidence toward achieving 2% inflation in light of Q1 GDP and recent inflation statistics. That may be contributing to a light rally in EGBs. Quite a few more ECB speakers are on tap between 7amET and 7:30am.
Richmond Fed President Barkin (12:50pmET) and NY Fed President Williams (1pmET) speak later on. And then the Fed’s Senior Loan Officer Opinion Survey will be updated at 2pmET. It will inform recent credit tightening trends in light of prior editions of the survey that showed material tightening (chart 1), but with a lag as responses were surveyed before much of the recent bond market sell off.
Canada is quiet.
Canada is quiet.
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