11:20 EU Mid-Market Update: Risk appetite bumps into a wall via TradeTheNews


- More EU inflation data aid recent ECB speak on transitory factors (France, Euro Zone readings below ECB target in session)

- Concerns over the delta variant of Covid-19 linger and prompting some risk aversion flows; continued news of rising COVID infections, new lockdown measures and fresh travel restrictions pouring cold water on recovery hopes

- Focus on upcoming US jobs data and potential clues from Fed on tapering (ADP today, weekly claims, Thurs and Non-farm on Friday).

Asia: - China Jun Manufacturing PMI (Govt Official) registered its 15th month of expansion (50.9 v 50.8e) - Japan May Preliminary Industrial Production M/M: -5.9% v -2.1%e; Y/Y: 22.0% v 27.0%e - South Korea May Industrial Production saw the annual pace at its highest level since mid-2010 (M/M: -0.7% v +0.7%e; Y/Y: 15.6% v 18.3%e)

Europe: - Chancellor of the Exchequer Sunak (Fin Min) expected to announce £15.0B in green savings bonds offering this week that will facilitate investment into renewable energy projects at a speech at Mansion House in London - UK Trade Sec Truss stated that was hoping to gain entry into Trans-Pacific Partnership (TPP) in 2022 with negotiations being months, not years

Americas: - Fed's Waller stated that did not move dot forward at FOMC Meeting in June; Had very optimistic outlook. If one believed a rate hike was needed by end 2022 or early 2023 than needed to finishing tapering before then Energy: - Weekly API Crude Oil Inventories: -8.2M v -7.2M prior (6th straight weekly draw).


*** **Equities** Indices [Stoxx600 -1.05% at 451.58, FTSE -1.01% at 7,015.72 , DAX -1.33% at 15,482.05, CAC-40 -1.33% at 6,479.88, IBEX-35 -1.58% at 8,774.00, FTSE MIB -1.50% at 24,977.50, SMI -0.78% at 11,934.90, S&P 500 Futures -0.28%].

Market Focal Points/Key Themes: European indices open mixed but fell into the red later in the session; concern over rising covid cases blamed for weak risk appetite; sectors trending higher include consumer discretionary and technology; sectors inclined to the downside include utilities and financials; Dankse Bank merges MobilePay with Vipps and Pivo; Grifols sells minority stake in Biomat to GIC; EssilorLuxottica will proceed with GrandVision acquisition; earnings expected in the upcoming US session include Entergy, General Mills and Bed Bath and Beyond.

***Equities*** - Consumer discretionary: Dixons Carphone [DC.UK] -1.5% (earnings) - Consumer staples: Safilo [SFL.IT] -17% (capital raise).

- Energy: Hurricane Energy [HUR.UK] +17% (Chairman resigns)

- Financials: Serco Group [SRP.UK] -1% (trading update)

- Healthcare: Indivior [INDV.UK] +10% (raises outlook)

- Technology: M&C Saatchi [SAA.UK] +7% (earnings).

***Speakers: - ECB's Villeroy (France) reiterated Council stance that inflation should go a bit higher in 2021 then down in 2022-23 period. Cautious but confident on economic outlook - ECB's Panetta (Italy) stated that saw a digital Euro decision by mid-July

- France President Macron reportedly could reveal pension reform plan before July 14th

- Italy Business Lobby Confindustria noted that the domestic economy rebounded in Q2 and growth would accelerate in H2

- Poland Central Bank Gatnar noted that inflation remained a reason for concern; favored a 15bps rate hike

- BOJ Nakagawa (new board member) stated that must be mindful of downside risks on economy and prices. Appropriate to continue with current easing. ETF buying were part of its easing steps and had positive impact on economy

- OPEC+ JMMC technical panel said to underscore rebound in oil demand and the expected strong growth in H2 2021. Cautions about uncertainties with pace of global economic recovery and the spread of the delta variant of the coronavirus. Looked to avoid risk of potential global oil market imbalances after April 2022 - Kuwait Oil Min Khaled al-Fadhel stated that supported OPEC+ efforts for market stability; meeting to focus on balancing oil market. Vaccinations were having a positive impact on market but OPEC+ cautious about raising production amid challenges.

**Currencies/ Fixed Income**

- FX markets were generally quiet into month/quarter-end - The recent strength in the greenback on the hawkish Fed putting gold on course for its biggest monthly drop since 2016. Focus on upcoming US jobs data and potential clues from Fed on tapering (ADP today, weekly claims, Thurs and Non-farm on Friday)

- EUR/USD steady at the 1.19 area despite more EU inflation data exceeding ECB target again (France, Euro Zone readings in session)

**Economic data**

- (NL) Netherlands May Retail Sales Y/Y: 7.9 v 10.2% prior

- (UK) Q1 Final GDP Q/Q: -1.6% v -1.5%e; Y/Y: -6.1% v -6.1%e

- (UK) Q1 Final Private Consumption Q/Q: -4.6% v -3.9%e; Government Spending Q/Q: 1.5% v 2.6%e; Gross Fixed Capital Formation Q/Q: -1.7% v -2.3%e; Exports Q/Q: -6.1% v -7.5%e; Imports Q/Q: -13.5% v -13.9%e

- (UK) Q1 Final Total Business Investment Q/Q:-10.7 % v -11.9%e; Y/Y: -16.9% v -18.1%e

- (UK) Q1 Current Account Balance: -£12.8B v -£14.0Be

- (FI) Finland Apr Final Trade Balance: -€0.3B v -€0.3B prelim

- (NO) Norway May Credit Indicator Growth Y/Y: 5.2% v 5.0% prior

- (DK) Denmark Q1 Final GDP Q/Q: -1.0% v -1.3% prelim; Y/Y: -0.8% v -1.3% prelim

- (DK) Denmark May Gross Unemployment Rate: 4.0% v 4.5% prior; Unemployment Rate (seasonally adj): 3.6% v 4.1% prior

- (ZA) South Africa May M3 Money Supply Y/Y: %1.8 v 2.0% prior; Private Sector Credit Y/Y: -0.4% v -1.0%e

- (FR) France Jun Preliminary CPI M/M: 0.2% v 0.2%e; Y/Y: 1.5% v 1.5%e

- (FR) France Jun Preliminary CPI EU Harmonized M/M: 0.2% v 0.2%e; Y/Y: 1.9% v 1.9%e

- (FR) France May PPI M/M: +0.5% v -0.8% prior; Y/Y: 7.2% v 6.7% prior

- (FR) France May Consumer Spending M/M: 10.4% v 7.5%e; Y/Y: 7.4% v 5.5%e

- (CH) Swiss Jun KOF Leading Indicator: 133.4 v 145.0e

- (CH) SNB Q1 Foreign exchange transactions (CHF): 0.3B v 8.7B prior

- (TR) Turkey May Trade Balance: -$4.1B v -$4.1Be

- (HU) Hungary Apr Average Gross Wages Y/Y: 10.1% v 8.7% prior

- (HU) Hungary May PPI M/M: -0.1% v +0.6% prior; Y/Y: 11.3% v 9.8% prior

- (AT) Austria Jun Preliminary CPI M/M: 0.4% v 0.3% prior; Y/Y: 2.7% v 2.8% prior

- (AT) Austria May PPI M/M: 0.9% v 1.1% prior; Y/Y: 6.0% v 4.7% prior

- (TH) Thailand May Current Account Balance: -$2.6B v -$1.4Be; Overall Balance of Payments (BOP): -$1.6B v +$0.3B prior; Trade Account Balance: $3.4B v $2.4B prior; Exports Y/Y: 44.4% v 19.1% prior; Imports Y/Y: 56.6% v 25.9% prior

- (SE) Sweden Apr Non-Manual Workers Wages Y/Y: 2.9% v 2.2% prior

- (DE) Germany Jun Net Unemployment Change: -38.0K v -20Ke; Unemployment Claims Rate: 5.9% v 5.9%e

- (CH) Swiss Jun Expectations Survey: 51.3 v 72.2 prior - (NO) Norway Central Bank (Norges) July Bank Daily FX Purchases (NOK): -1.7B v -1.7B prior

- (CZ) Czech May M2 Money Supply Y/Y: 10.7% v 10.9% prior

- (PL) Poland Jun Preliminary CPI M/M: 0.1% v 0.3%e; Y/Y: 4.4% v 4.6%e

- (IT) Italy May PPI M/M: 1.3% v 1.4% prior; Y/Y: 10.0% v 8,2% prior

- (ES) Spain Apr Current Account: +€0.4B v -€0.2B prior

- (PT) Portugal Jun Preliminary CPI M/M: 0.1% v 0.2% prior; Y/Y: 0.5% v 1.2% prior

- (PT) Portugal Jun Preliminary CPI EU Harmonized M/M: 0.2% v 0.3% prior; Y/Y: -0.6% v +0.5% prior

- (HK) Hong Kong May Retail Sales Value Y/Y: 10.5% v 6.9%e; Retail Sales Volume Y/Y: 7.8% v 6.2%e