LNG: China June LNG Imports Edge Up Closer to Year Ago Levels

• The brief spell of dollar strength following the US employment data on Friday has dissipated, with the dollar index now lower compared to pre-NFP levels. This morning’s 0.25% advance for EURUSD is seeing the pair test above the post-NFP highs around the 1.1430 mark.
• Price action underpins the underlying bullish trend, and immediate topside levels of note are 1.1457 and 1.1495, last Friday’s high and the ECB peak respectively. Further out, the cycle high of 1.1573 remains the key bull trigger. Initial support is at 1.1334, the 20-day EMA.
• Goldman Sachs believe the most recent dollar consolidation is more the “end of the beginning” rather than the “beginning of the end” of the Dollar’s shift lower. Given the confirmation of a slowdown in US activity and a shift in global investor appetite, GS are rolling their EURUSD forecasts to 1.17, 1.20 and 1.25 in 3, 6 and 12 months (from 1.12, 1.15 and 1.20).
• Following the hawkish reaction to the ECB's June decision and the stronger-than-forecast Q1 compensation per employee reading, staff's forward looking wage tracker on Wednesday will be watched for confirmation that the downward trajectory of pay pressures is intact. US CPI provides the highlight on the US calendar.

Super-long end outperformance evident in German ASWs, with spreads vs. 3-month Euribor 0.7-1.5bp wider on the day.

• The outright rally in bonds is seemingly driving the widening.
• It’s hard to read too much into these moves given the lack of meaningful headline drivers and reduced liquidity owing to Whit Monday (not a market/ country-wide public holiday in most of Europe, although many take it off, thinning out liquidity).
• Broader macro sentiment remains key for spreads intraday, while medium-term focus continues to fall on German issuance intentions and the country's fiscal situation.
• The medium-term factors seemingly remain bearish for long end swap spreads, but the highly volatile headline environment that we are operating in at present means that any such weakness in those spreads is unlikely to come in a straight line.
• Pre-existing short positioning in the long end may also provide increased vol. during any rallies.

• As mentioned multiple times already, but now the BTP/Bund spread is through 90.4bps, this was the 2021 low, although the initial key psychological support is still at 90.00bps.
• A break through, opens to 87.5bps, the 2015 low, and we would have to go back all the way to April 2010 to see these tighter levels.

(Chart source: Bloomberg Finance LP/MNI).