Jun 30, 20233 min read

China macro soft / Powell & ECB hawkish / U.S claims and GDP stronger, up next U.S PCE

U.S macro data stronger again yesterday (jobless claims fell 26K to 239K, Q1 GDP 2% higher than 1.3% expected) >>> more than 1 hiked got repriced into year-end, as Powell flagged on Wed ''2 hikes or more by year-end', 2y UST yields up 15bps, USDollar not much higher though, markets awaiting PCE data this afternoon! together with quarter-end flows
China’s June manufacturing PMI: 49.0, third monthly contraction (steady) and China’s June non-manufacturing PMI: 53.2, weakest this year to date
Riksbank Gov: Riksbank hiked 25bps to 3.75%..not enough...SEK weakening a 'relatively important' risk factor, EURSEK pushing higher again to all time highs
Yen briefly hits 7-month low against dollar at 145 mark. Finance minister warns against excessive weakening of Japanese currency
ECB hawks take aggressive stance on rates after UK inflation wake-up call. Persistent price pressures facing BoE boost case for keeping borrowing costs high, say eurozone policymakers
Euro area core HICP inflation did not increase as much as feared in June (+10bp to 5.4% YoY). Services inflation was up 35bp on German base effects (rail ticket) but core goods inflation eased 30bp, with all measures converging to 5.5%... still pretty far from the ECB target down at 2%
Independent review into the supervisory intervention on Interest Rate Hedging Products, pretty big news for UK banks... and all those SME's..
Austria’s foreign minister has declined to attend an Opec conference in Vienna next week amid an escalating dispute over the oil cartel’s decision to bar large numbers of prominent news organisations from attending
After settlement of the bigly TLTRO repayment, excess liquidity declined by nearly euro 500bn yesterday, the most on record, till a huge €3.5tn out there
Energy crisis and inflation push (ed?) more German firms into insolvency -study

Markets :

Rates converging with Powell's guidance on Wed
Bonds, USD react and risk pushed higher still as economy 'booming', what happened to all the recession calls ? too early
UST2y nearing 4% again, 3.88% latest
SPX 4400+, in reality SPX7 powering ahead still