EQUITIES: Estoxx block trade
Jun-05 08:27
Estoxx Block trade, suggest seller:
- VGM4 6k at 4994.00.
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EUROZONE DATA: Services PMIs improve more in core than periphery vs March
May-06 08:26
After this morning's 0.5 point upside surprise to the Spanish services PMI, the Italian services PMI was 0.2 points lower than expected while theFrench print was revised up 0.8 points from the flash and German print revised down 0.1 points. Overall, this led to the Eurozone services PMI print being revised up by 0.4 points.
- Despite the upward revision, the French services PMI print of 51.3 was still below the Eurozone print of 53.3 (which was similar to the German 53.2). The Spanish print was highest at 56.2 and Italian above the EZ aggregate at 54.3.
- This leaves all of the big four EZ economies with services PMIs above the breakeven 50 level with the Italy and Spain seeing similar prints to March but Germany and France seeing marked improvements.
- Bund futures are around 15 ticks off their intraday high (131.54) at writing - but this is largely due to Friday's high of 131.57 holding.
OPTIONS: Expiries for May06 NY cut 1000ET (Source DTCC)
May-06 08:20
- EUR/USD: $1.0700-20(E1.9bln), $1.0745-50(E1.3bln), $1.0800(E586mln)
- USD/JPY: Y152.00-10($909mln), Y153.00-07($601mln), Y154.00($1.0bln)
- AUD/USD: $0.6500(A$624mln), $0.6625(A$1.7bln)
- USD/CAD: C$1.3900($993mln)
- USD/CNY: Cny7.2475($627mln)
RBA: MNI RBA Preview - May 2024: Prolonged Hold While Inflation “Sticky”
May-06 08:06
- The RBA is widely expected to leave rates at 4.35% at its May meeting. There is some chance that the tightening bias will be reinstated following the higher-than-expected Q1 CPI data but we believe that is unlikely given it was only dropped at the last meeting and that the RBA has covered themselves as it “is not ruling anything in or out”.
- Updated staff forecasts will be published with the May meeting statement and even if there are near-term upward revisions to inflation, the timing of the return to target will be key. There are likely to be some near-term revisions but we are not expecting anything material in 2025 and 2026.
- Inflation is moving closer to the band but slower than expected in February and so the Board can’t yet be confident that it is returning “sustainably” to target and it could still “be some time yet” before it does.
- Given the highly uncertain outlook and changes to the RBA Board, it is easy to see rates on hold for all of 2024. With an election due by May 2025, early next year is also tricky for a rate cut but February is still possible.
- See full preview here.
