EU COMMUNICATIONS: Eutelsat: Headlines

• Stocks hold mild to modestly weaker ahead midday Tuesday, inside relatively narrow ranges as Eminis snap a six day winning streak with IT and Energy sectors underperforming. With limited data, investors focused on upcoming earnings from Modine Mfg, Toll Brothers, Palo Alto Networks, Viasat and Evolv Technologies Holdings after the close.
• Currently, the DJIA trades down 89.66 points (-0.21%) at 42701.78, S&P E-Minis down 22 points (-0.37%) at 5960.25, Nasdaq down 85.5 points (-0.4%) at 19128.9.
• Semiconductor makers weighed on the tech sector early Tuesday, laggers include Super Micro Computer -2.92%, Arista Networks -1.84%, NVIDIA -1.64% and Fair Isaac -1.61%.
• Oil, gas and services shares weighed on the Energy sector: Texas Pacific Land Corp -2.43%, Baker Hughes -1.00%, Targa Resources -0.89% and ConocoPhillips -0.88%.
• On the positive side, electricity providers led gainers in the first half: Eversource Energy +3.78%, Dominion Energy I+2.65%, Entergy Corp +1.37% and NextEra Energy +1.08%.
• Meanwhile, retailers and food producers buoyed Consumer Staples: Dollar General +4.02%, Dollar Tree +2.96%, Kroger +1.86% and J M Smucker +1.79%.

Former State Secretary and German Finance Ministry chief economist speaks to MNI about higher defence spending.- On MNI Policy MainWire now, for more details please contact sales@marketnews.com

Expectations for a June Bank of Canada cut were pared sharply by the hotter-than-expected April CPI report. In particular while the headline reading was slightly above-expected (1.7% Y/Y v 1.6% survey), the unexpectedly strong rise in the core metrics may keep the BOC holding the overnight rate at 2.75% for a 2nd consecutive decision  in June, after it held steady in April for the first time in 8 meetings.

• Meeting-dated OIS is now pricing in a little better than 35% chance of a 25bp June cut, vs closer to 70% pre-CPI.
• The BOC's latest quarterly forecast for Q2 trim/median average inflation was 2.95% (taking the average of the BoC's two trade scenarios), so the 3.15% printed in the first month of the quarter will give impetus for waiting on further developments before easing rates again.
• There are arguably some mitigating factors in the details, for instance a slight downtick in inflation breadth (more on which shortly), but the strong services readings through the report (3.5%, up from 3.1% prior) and durable goods (1.7%, highest since Q2 2023, after 1.1%) as well as on other core metrics (ex 8 most volatile & indirect taxes up to 2.5% from 2.2% prior). On the whole, underlying inflation appears to be reaccelerating if anything.
• Barring unexpected developments, for instance on the trade front, the remaining case for a cut on June 4 would appear to hinge on clearer evidence in the hard data that tariff uncertainty is translating through to activity to a degree that warrants accommodation. In that regard, Q1 GDP (May 30) could play a role, with May job market data (Jun 6) coming too late.
• The BOC's last statement noted that the governing council "will continue to assess the timing and strength of both the downward pressures on inflation from a weaker economy and the upward pressures on inflation from higher costs. Our focus will be on ensuring that Canadians continue to have confidence in price stability through this period of global upheaval. This means we will support economic growth while ensuring that inflation remains well controlled."