THAILAND: Q2 Consumer Sentiment Moderation Signals Slower Q2 Consumption

The latest Nikkei sources piece reaffirms the idea that the BoJ will discuss an end to its quarterly reduction in bond buying at the upcoming monetary policy meeting, along with hiking its policy rate to 1.00%.

• Meanwhile former BoJ Executive Director, Hideo Hayakawa, tells Bloomberg that the Bank is likely to follow up a June hike with further tightening in October “at the earliest”. He suggests that “the BoJ is already falling behind the curve a little, so they need to catch up at some point.”
• ~23bp of tightening is priced for next week’s monetary policy decision, with 37.5bp of hikes priced through October (50% odds of another hike being delivered through that meeting).
• JGB futures add ~15 ticks on the Nikkei reports surrounding JGB purchases, with 10-Year JGB yields 1.0-1.5bp lower.
• Meanwhile, USD/JPY edges lower, presumably on the combination of the potential for swifter-than-expected follow up tightening beyond the upcoming meeting and the potential for less stress in the JGB market (per the two stories combined). 

• RES 4: 6276.00 1.500 proj of the May 4 - 6 - 18 price swing    
• RES 3: 6231.02 0.764 proj of the Mar 23 - Apr 17 - May 4 price swing 
• RES 2: 6200.00 Round number resistance 
• RES 1: 6153.00 High May 25 and the bull trigger
• PRICE: 6067.00 @ 06:27 BST Jun 9
• SUP 1: 5922.78 50-day EMA     
• SUP 2: 5684.00 Low May 4
• SUP 3: 5525.00 Low Apr 2
• SUP 4: 5404.00 Low Mar 31

Trend signals in EUROSTOXX 50 futures are pointing north, highlighted by moving average studies that remain in a bull-mode position. The recent pause appears to be a flag formation - a bullish continuation pattern. A resumption of gains would pave the way for a climb towards 6200.00 next. Firm support lies at 5922.78, the 50-day EMA. A clear break of the average would undermine the bull theme.

Spain, Belgium and Italy are still due to sell bills this week, while Germany and France came to the market yesterday. We expect issuance of E26.4bln, down from E33.9bln last week.

• This morning, Spain will look to issue a combined E2.0-3.0bln of the 3-month Sep 4, 2026 letras and the 9-month Mar 5, 2027 letras.
• Also today, Belgium will look to sell a combined E3.1-3.5bln of TCs: An indicative E1.5bln of the 3-month Sep 10, 2026 TC and an indicative E1.8bln of the new 12-month Jun 10, 2027 TC.
• Finally tomorrow morning, Italy will look to sell E8.5bln of the new 12-month Jun 14, 2027 BOT.