CANADA DATA: Industrial Price Inflation Cools In May
Jun-20 13:17
- Canada's Industrial Price Index surprisingly slipped -0.5% M/M in May (cons 0.0, albeit only three analyst estimates) after -0.8% M/M in April. There wasn't much different on the month when excluding energy & petroleum products, at -0.3% M/M.
- It left IPPI inflation at 1.2% Y/Y in May, led by gold as prices were boosted by trade uncertainty and geopolitical tensions. It's an eighth consecutive positive reading although is the softest pace since October having peaked at 5.6% Y/Y in January.
- Silver, beef and veal were also key contributors to the increase but gains were moderated by a decline in gasoline and diesel prices.
- The raw material price index meanwhile fell -0.4% M/M, a third straight monthly decrease, led by crude as concerns that the crude oil market will be oversupplied when OPEC+ announced increase in its production early May. Excluding crude energy products, RMPI increased +1.6% M/M in May.
- It left raw material price inflation at -2.8% Y/Y after -3.9% Y/Y in April for a second consecutive negative reading having peaked at 11.3% Y/Y in January.
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BONDS: Gilt/Bunds Set To Close Above 210bp
May-21 13:16
The 10-Year gilt/Bund spread is set to close above 210bp for the first time since April 22.
- Relative betas to U.S. Tsys, hawkish BoE developments and this morning’s firmer-than-expected UK CPI data explaining much of the ~15bp of widening seen since May 6.
- Downtrend resistance drawn off the Dec ’24 closing highs comes in at 214.3bp today, protecting the April closing high (218.8bp).
- The UK’s delicate fiscal situation and stickier-than-expected CPI data presents widening risks to the spread, with the market less worried about the future increase in German issuance in recent weeks.
Fig. 1: UK/German 10-Year Yield Spread (bp)
Source: MNI - Market News/Bloomberg
FOREX: FX Exchange traded Options, all looking for USD Weakness
May-21 13:12
Few Notable FX Exchange traded Option, all looking for further USD Weakness:
- EURUSD (3rd July) 1.1550c, bought for 0.0082 in ~1k, the Underlying is much higher than the spot at 1.1418.
- JPYUSD (3rd July) 72.00c, bought for 0.63 in 1.9k (underlying is at 70.535).
- CADUSD (3rd July) 73.00c, bought for 0.37 in ~4.16k (underlying is at 72.53).
PIPELINE: Corporate Bond Update: $4B ADB 5Y SOFR Launched
May-21 13:05
- Date $MM Issuer (Priced *, Launch #)
- 05/20 $4B #ADB 5Y SOFR+42
- 05/21 $1.25B #Kommunalbanken +5Y SOFR+49
- 05/21 $1B Finnvera WNG 5Y SOFR+53a
- 05/21 $Benchmark Citibank 2Y +85a, 2Y SOFR, 5Y +105a, 5Y SOFR
- 05/21 $Benchmark BPCE 6NC5 +150a, 11NC10 +175a
- 05/21 $Benchmark Turkiye 7Y 7.75%a
- 05/21 $Benchmark OKB 3Y +34
