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Livesquawk - US Briefing - Thursday 03.06
US Briefing - Thursday 03.06
Headlines
  • Fed to Sell Corporate Bonds, ETFs Acquired During Covid-19
  • Politico: GOP Mulls Infrastructure Counteroffer As Soon As Friday
  • Biden To Amend Trump’s China Blacklist, Target Key Industries
  • Russia Plans To Cut Dollar Holdings In Its Wealth Fund To Zero
  • US Tsy: G7 Expected To Endorse US Global Min. Tax Proposal
  • Covid-19 Cases Hit Lowest Point In US Since Pandemic Began
  • Eurozone May Services And Composite PMIs Revised Higher
  • EU Set To Sanction Belarus This Week Over Ryanair Flight
  • German Economy Min: 2021 GDP Growth To Be At Least 3.5%
  • Turkish Inflation Slows Unexpectedly, Raising Rate Cut Pressure
  • UK May Services PMI Hits 24 Year High; Composite Print Beats
  • UK Set To Stay Cautious On Foreign Travel Amid Covid Surge
  • UK, Australia Hold More Talks To Try Get Trade Deal In Weeks
  • Chinese May Caixin PMI Services: 55.1 Misses 56.2 Forecast
  • China MOFCOM: Begun Normal Trade Dialogue With US
  • China Banks Ready Bond Sales For Southbound Link Launch
  • Bank Of Russia Weighing Keeping, Raising Rate On June 11
  • API: US Crude Stockpiles Fell 5.36 Million Barrels Last Week
  • UN: Global Food Prices Surge To Highest In Almost A Decade
  • Airbus Set To Report An Uptick In Deliveries For Month Of May
  • SoftBank Group Prices Japan’s Biggest 2021 Corporate Bond
Commentary
Russia Cuts Dollar Holdings From Wealth Fund Amid Sanctions

Russia will eliminate the dollar from its National Wellbeing Fund, shifting to euros, yuan and gold, Finance Minister Anton Siluanov said, as the Kremlin seeks to reduce exposure to U.S. assets amid threats of sanctions. The transfer, which affects about $119 billion in liquid assets, will take place within the central bank’s huge reserves, however, making its market impact -- if there is one -- hard to trace. The Bank of Russia has steadily reduced holdings of dollars in the last several years as sanctions pressures from the U.S. and European Union have grown.

 

“We can make this change rather quickly, within a month,” Siluanov told reporters at the St. Petersburg International Economic Forum. The wealth fund currently holds 35% of its liquid assets in dollars, worth about $41.5 billion, with the same amount in euros and the rest spread across yuan, gold, yen and pounds.

(Bloomberg – Continue Reading)

Fed Plans To Wind Down A Pandemic Corporate Credit Facility

Source: Federal Reserve

The Federal Reserve Board plans to begin gradually selling a portfolio of corporate debt purchased through an emergency lending facility launched last year, as the Covid-19 pandemic was spreading panic through financial markets.“ Portfolio sales will be gradual and orderly, and will aim to minimize the potential for any adverse impact on market functioning by taking into account daily liquidity and trading conditions for exchange traded funds and corporate bonds,” the Fed said in a statement on Wednesday.

 

The New York Fed will provide additional details before sales begin, it added. There was around $13.7 billion outstanding in the Fed’s Secondary Market Corporate Credit Facility in a range of corporate bond and ETF holdings, according to balance sheet details updated last week. “At the time, it defined the controversial, outer limits of the Fed’s involvement in financial markets,” said Mark Spindel, chief investment officer for the District of Columbia’s Retirement Board. At such tight spreads for corporate debt, “it would seem to be a facility that has run its course.”

(Bloomberg – Continue Reading)

US Job Creation Set for Rebound In May

Economists say US employment bounced back in May after April's disappointing showing as the world’s largest economy continues its attempts to put the pandemic in the rear view. A poll of analysts predicts a 663,000 rise in employment for last month following April’s surprisingly weak 266,000 result, which was less than a third of the expected 1mln hires. The headline jobless rate for May is forecast to fall to 5.9% after the surprise increase to 6.1% in the previous month, and average earnings are seen up sharply on the year. 

 

 The disappointing job growth in April came after the March number was revised upward, which exacerbated reactions, according to analysts. “Rogue payroll figures are certainly not unknown, and our suspicion is that the swing between the two months partly reflects data volatility,” Investec said. “Another possibility is that employment growth was limited by labour supply.”

(LiveSquawk – Continue Reading)

EZ Business Growth Soared In May As Restrictions Eased

Euro zone business activity surged in May as the easing of some coronavirus related restrictions injected life into the bloc’s dominant services industry, a survey showed, echoing data on Tuesday which showed factories had their best month on record. An acceleration of vaccine programmes across the region and a fall in reported daily cases has allowed governments to remove some measures imposed to try and stop the spread of the virus.

 

That meant IHS Markit’s final composite Purchasing Managers’ Index (PMI), seen as a good gauge of economic health, jumped to 57.1 last month from April’s 53.8, its highest level since February 2018. May’s final reading was ahead of a preliminary 56.9 indication and comfortably above the 50 mark separating growth from contraction. An index covering the service industry soared to a near three-year high of 55.2 from 50.5, just beating the 55.1 flash estimate.

(Reuters – Continue Reading)

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