European Briefing - Wednesday 03.06
Headlines
  • Protests Over George Floyd Death Continue As Curfews Tightened
  • Pentagon Moves About 1,600 Army Troops Into Washington Region
  • President Trump Backs Off Push To Federalise Forces Against Riots
  • Chinese Services Sector Growth Bounces Back, Job Losses Continue
  • G7 Finance Leaders To Hold Virus Teleconference On Wednesday
  • US Health Officials Fear US Protests Will Hasten Coronavirus Spike
  • NIH Director Fauci: ‘Cautiously Optimistic’ About Covid-19 Vaccine
  • UK PM Johnson Offers Hope Of Refuge To 3Mln Hong Kong People
  • UK Specialist Lenders Seek Access To Cheap Bank Of England Funds
  • Germany Forced To Delay Stimulus Package Amid Coalition Impasse
  • Wall Street Strategists Warn Dollar Could Be Set For ‘Dramatic’ Falls
  • US Administration Trusts Global Oil Producers Ahead Of OPEC+ Meet
Commentary
US Putting Trust In Global Oil Producers Ahead Of OPEC+ Meet

The Trump administration believes ahead of an expected OPEC+ meeting this week that major oil producers such as Saudi Arabia and Russia will honour their pledges to cut crude production and will not damage the global economy by changing course, a senior official said on Tuesday.

 

“We trust that other major oil producers will not revert to policies that impede an orderly and swift recovery from these unprecedented global economic conditions,” a senior administration official told Reuters in response to a question about the administration’s approach to global oil producers ahead of the OPEC+ meeting expected on Thursday.

 

In early April, when Saudi Arabia and Russia boosted oil output in a war for market share during the height of the coronavirus pandemic - action that strangled fuel demand and slammed crude prices - the administration took an aggressive stance. (RTRS - Continue Reading)

Incoming BoC Chief To Stay The Course At Inaugural Meeting

Tiff Macklem’s first rate meeting at the helm of the Bank of Canada on Wednesday is expected to produce virtually the same policies set during the last meeting, according to economists. The overwhelming market consensus is for the bank’s governing council to keep the overnight rate at 0.25pct and remain prepared to add to its current quantitative easing programme if required.

 

At the start of the corona crisis the bank was quick to implement major liquidity programmes amounting to weekly asset buys of at least CAD5bln of Government of Canada bonds. Since the crisis began, the bank has reduced its policy interest rate by a total of 150 basis points to 0.25pct, what the bank calls its "effective lower bound".

 

A note from Carlos Capistran and Ben Randol of BofA Global Research says, “The BoC acted fast amid the pandemic to bring the policy rate down to the effective lower bound. We expect the BoC to leave the policy rate at the current level for many quarters and believe the chance of a negative rate is low.” (LiveSquawk - Continue Reading)

German Unemployment Set For Another Surge

An expected rise in German unemployment could push the total number of additional claims for the April-May period to over half a million in a country where more than 10mln people were already eligible for support from the government’s short-time work scheme.

 

The seasonally adjusted number of unemployed in May is expected to jump by 200,000 after April’s record increase of 373,000, which was nearly five times the market estimate of 76,000 and almost 400 times March’s rise of 1,000. The seasonally adjusted unemployment rate in May is forecast at 6.2pct versus April’s 5.8pct mark.

 

Germany’s Federal Labour Office said more than 750,000 companies had applied for the country’s Kurzarbeit programme in April, which makes coverage available for up to 10.1mln workers. To put this in perspective, the office said only 3.3mln people were registered for the programme during the global financial crisis in 2009. (LiveSquawk - Continue Reading)

Files & Links
DATA
APAC GOVERNMENT/CENTRAL BANKS
EUROPEAN/AMERICAS GOVERNMENT/CENTRAL BANKS
FX
FIXED INCOME
COMMODITIES/ENERGY
APAC EQUITIES
EUROPEAN/US EQUITIES