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Livesquawk - US Briefing - Thursday 10.06
US Briefing - Thursday 10.06
Headlines
  • ECB Likely To Stay On Hold, Avoid Taper Talk; Decision At 1245BST
  • Biden, G-7 Leaders Plot Global Vaccination Surge To End Pandemic
  • Biden, UK's Johnson Vow To Speed Up Opening Of US-UK Travel
  • French April Industrial & Manufacturing Production Miss Estimates
  • Norwegian & Swedish May CPI Prints Miss Estimates M/M & Y/Y
  • Italy Sells Top-Planned EUR7.75Bln Range In 3, 7, 20 Year Auctions
  • JPMorgan Look For BoE Rate Hike In Q422 (Previously Saw Q123)
  • UK’s Johnson Warns Covid Cases Rising Before Lockdown Decision
  • China And The US Agree To Push Forward Trade, Investment Ties
  • China Passes Law To Counter Foreign Sanctions After 2nd Review
  • China May New Bank Loans Unexpectedly Rise, Credit Growth Slows
  • PBoC Governor Yi Gang: Sees Stable Policy, Inflation Below Target
  • OPEC To Release June Monthly Oil Market Report At 1315BST
  • WSJ: Coinbase Teaming Up With 401K Provider To Offer Crypto
  • JPMorgan Analysts Sees Signal Of Coming Bear Market In Bitcoin
  • Bitcoin Put In Highest Risk Category In Bank Capital Proposal
  • United Airlines May Split Major Jet Order Between Boeing, Airbus
  • GameStop Slides On Stock Sale Plan, SEC Trading Investigation
  • BT Rises; Altice Buys A 12% Stake In BT But Doesn't Plan Takeover
Commentary
ECB Likely To Stay On Hold, Avoid Taper Talk

Source: European Central Bank

The only thing “normal” about this year is that the word is part of another word which sums up the current situation: abnormal. This condition also rings true for Europe’s monetary policy and those who make it. A case in point is the unprecedented EUR 1.85 tln Pandemic Emergency Purchase Programme (PEPP), which keeps chugging along. “Normally,” this is the time of year for European Central Bank officials and staffers to start counting clean socks ahead of their annual sojourn to Sintra, Portugal later this month for the lender’s retreat-cum-banking forum, an event that in the past has spawned some pretty market-shaking commentary from ECB presidents. 

 

But not this year. The Sintra event – normally scheduled in mid-June – is to be held as a virtual conference in September, and central bank watchers may have to wait at least that long for the ECB to begin talking about shifting its policy gears. Few central bank mavens expect the ECB to make waves this week. The European recovery has been fitful at best, inflation in the single-currency area is now hotter than a two-dollar pistol, and the sluggish vaccination programmes on the Continent mean that some countries are still restricting commerce.

(LiveSquawk – Continue Reading)

US Inflation Expected To Hit Multi-Year High In May

US inflation will tip 13-year highs if May’s annual consumer price index rises in line with forecasts, which see the headline rate hitting a level last seen when oil prices peaked at USD 146 a barrel. Expectations for annual core inflation have prices at their strongest in nearly 20-years. Analysts look for an increase in headline CPI to 4.7% year-on-year versus 4.2% in April. On the month, forecasts are for a 0.4% gain, slowing from 0.8% previously. Annual core CPI is predicted to rise to 3.4% following 3% last month.

 

 Experts are split on whether this will be the peak for inflation. Base effects have played a part in keeping prices elevated, but as the economy reopens post the pandemic, upside risks are on the horizon. “Supply chain issues, rising commodity prices, labour market shortages and rising house prices suggest to us inflation could remain more elevated and be more persistent than the Federal Reserve are publicly forecasting,” warned ING Research in a note. “This is a key factor why we think the Fed will raise the interest rate sooner than 2024.”

(LiveSquawk – Continue Reading)

Do Bond Traders Know Something About Inflation We Don't?

In theory, few bond investors would jump at the chance to buy 10-year U.S. Treasuries at a yield of less than 1.5% some 24 hours before a much-anticipated report is expected to show the highest core inflation rate in America since the early 1990s — when that same yield was above 6%. And yet the world’s biggest bond market staged a ferocious rally on Wednesday that took the benchmark 10-year yield to as low as 1.47%, below its 100-day moving average for the first time in 2021 and right up to a key resistance level from March and May. It’s the most convincing bullish move in a long while and a sharp departure from the recent narrative of accelerating U.S. growth and fiscal spending pushing Treasury yields ever higher.

 

Perhaps the rally was exacerbated by those who had built up large short positions in Treasury futures but held off from covering those wagers after last week’s jobs report. Still, the fact that Treasuries largely held gains throughout U.S. hours, and a $38 billion 10-year note auction drew the strongest demand in 11 months at a yield of 1.497%, suggests the buying power at these levels is real. Bond traders stepping in now are either crazy, brilliant or both. (Bloomberg – Continue Reading)

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