EMISSIONS: EEX Sets To Launch EU ETS 2 Futures On 7 July

• EUR/USD: $1.1200(E1.5bln), $1.1250(E885mln), $1.1350-55(E1.2bln), $1.1400-05(E1.1bln), $1.1450(E1.3bln)
• USD/JPY: Y143.50($698mln), Y144.15-25($580mln), Y145.00($630mln)
• AUD/USD: $0.6435-55(A$1.7bln)
• USD/CAD: C$1.3600($560mln), C$1.3735-50($1.4bln), C$1.3800($621mln)

Factory orders came in weaker than expected in April, with the 3.7% M/M contraction exceeding the 3.2% drop expected by consensus. Ex-transport orders told the same story: -0.5% in April (+0.2% expected), failing to improve from March's -0.5%.

• This marked the biggest monthly pullback in manufacturing orders in 15 months, and more than reversed March's rise to put manufacturing orders only slightly higher than in sequential. Clearly, there was some pulling-forward of orders in March, ahead of anticipated tariff impacts.
• The strong Feb-March performance kept momentum strong on a 3M/3M annualized rate basis though, at 7.6%, remaining around the strongest levels since mid-2022 - however at April's pace, this is unlikely to persist (and core durables orders are pointing to a slowdown).
• Total factory orders consist of nondurable and durable goods orders, each of which were roughly equal in dollar value in April - nondurable goods orders fell 0.9% M/M, a marking a second consecutive month of sharp contraction (-0.7%).
• Durable goods orders (-6.3%, after +7.6%) were basically unchanged in the final from the preliminary readings, though core capital goods orders (nondefense, ex-aircraft) were adjusted slightly lower to -1.5% (was -1.3%).
• With orders pulling back, and ISM manufacturing among other surveys in contractionary territory, equipment investment and factory activity in Q2/Q3 looks likely to remain subdued vs Q1. Though for equipment investment in particular, this may just be relative: the Atlanta Fed is estimating 8.8% quarterly growth in Q2 after a staggering 24.8% rise in Q1.

ERM5 97.875/98.00/98.125/98.25 call condor, sold out at 11 in 10k.