Closing Wrap - Friday 29.05
Headlines
  • Eurex Trading Holiday On 1st June 2020 (White Monday)
  • Trump Weighs China Sanctions Yet Won’t Quit Phase One Deal
  • Fed’s Powell: Fed Crossed Red Lines When Virus Demanded Action
  • Fed Slows Pace Of Tsy Buying To $4.5 Bln/Day From $5 Bln/Day
  • Oil Jumps Nearly 80% In May, Best Month On Record
  • Europe Warns Of $963 Bln Trade Slump With World
  • UK Biz Must Start Paying Towards Worker Furlough Scheme From Aug
  • 99% Chance That COVID-19 Vaccine Will Work, Says Chinese Firm
  • Twitter Targets For Rule Violation Shift From Virus To Violence
  • Occidental Cuts Dividend Again, Now To 1 Cent
  • UK, Allies Plan Alternatives To Huawei As China Tensions Grow
Commentary
EZ Inflation Nears Zero Ahead Of ECB Meeting

Eurozone headline consumer price growth fell in-line with the market consensus to 0.1pct in May, and the lowest inflation rate in four years is sparking calls for more monetary stimulus from the European Central Bank Governing Council ahead of next Thursday’s rate decision.

 

Energy prices plummeted on an annual basis, dropping 12pct from May of last year, according to preliminary data from Eurostat, the EU statistics office. The annual core inflation rate was unchanged at 0.9pct, which beat the market expectation of a decline to 0.8pct.”

 

“Time for ECB to step up action!” tweeted Adam Tooze, the director of the European Institute at Columbia University In New York City.

 

But Europe’s central bankers have already chambered another QE round, according to Claus Vistesen, chief Europe economist at Pantheon Macroeconomics. “These data won’t affect the path of ECB policy in the near term. We expect the central bank to announce an extension of the PEPP [Pandemic Emergency Purchasing Programme] next week to mid-2021, and a lift in its amount to EUR1tln from the current EUR750bln. (LiveSquawk – Continue Reading)

Trump Action Aside, China Crop-Buying Goal Is Becoming Untenable

President Donald Trump is preparing to announce actions on China. Whether or not that affects his phase-one trade deal, one thing is already clear: the target for agricultural purchases is becoming untenable.

 

China bought just $3.35 billion in American agricultural products in the first three months of the year, the lowest for that period since 2007, according to data from the U.S. Department of Agriculture. That’s a fraction of the $36.5 billion it promised for 2020 under the partial trade deal reached in January.

 

The spread of the novel coronavirus has put China well behind the necessary pace to meet its phase one pledges. And while purchases of everything from pork to soybeans have picked up in the past two months, it’s “highly unlikely” the nation will reach the target given low commodity prices, according to Rabobank, one of the largest lenders to the agriculture industry. (Bloomberg – Continue Reading)

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