US-CHINA: Sec State Blinken To Travel To China, June 16
The State Department has confirmed that Secretary of State Antony Blinken will travel to China on June 16 to meet top officials and discuss open lines of communication. The trip may include a meeting with Chinese President Xi Jinping and lay the ground for a Biden-Xi bilateral before, or during, the September 9-10, G-20 Summit in New Delhi.
- Blinken's trip will be the highest level US visit China since 2018 and lay down a marker in efforts to repair ties following an unprecedented deterioration in relations over the past year.
- Blinken and Chinese Foreign Minister Qin Gang, held a rare call yesterday during which Qin criticised Washington for perceived interference in China’s “core issues” such as Taiwan, and told Blinken that the US must “stop interfering in China’s internal affairs.”
- Treasury Secretary Janet Yellen continued her recent dovish tone on China in testimony to Congress yesterday. She rejected that the US seeks to “decouple” from China and stressed that national security measures are not designed to constrain China’s growth. Yellen: “...it would be disastrous for us to attempt to decouple from China... I certainly do not think it is in our interest to stifle the economic progress of the Chinese people."
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MNI: US NY FED EMPIRE STATE MFG INDEX -31.8 MAY
- MNI: US NY FED EMPIRE STATE MFG INDEX -31.8 MAY
- US NY FED EMPIRE MFG NEW ORDERS -28.0 MAY
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- US NY FED EMPIRE MFG PRICES PAID INDEX 34.9 MAY
EGBS: Tsy Cheapening Applies Some Light Cross-Market Pressure
$IG supply-related pressure and perhaps some incremental weakness stemming from comments made by Atlanta Fed President Bostic (’24 voter) apply pressure to U.S. Tsys, meaning that EGBs are under some modest pressure on feedthrough. The belly Bund curve bear steepns, with benchmarks 2-4bp cheaper on the day, although the German bond futures contracts fail to retest their early session lows (just).
- BTP futures are negative on the day once again, while cash BTPs are cheaper across the curve, albeit with 10s holding onto some of their early tightening vs. Bunds, last ~2.5bp tighter on the day.
- Recent flow has seen some roll down and reduction of an existing RXN3 139.00/140.50 call spread position into the 136.50/137.50 call spread.
ESM ISSUANCE: 10-year syndication: Priced
- Issuer: European Stability Mechanism (ESM)
- Reoffer: 3.047% / 99.600
- Spread set earlier at MS+7bps (Guidance was MS+9bps area)
- 2.30% Feb-33 Bund + 73.40bp / 101% HR / ref: 99.875
- Size: E2bln (will not grow)
- Final books in excess of E24bln (ex JLM interest)
- Coupon: 3.00% short first
- Maturity: 23-Aug-2033
- Settlement: 23-May-2023
- ISIN: EU000A1Z99S3
- Bookrunners: Citi, CACIB(B&D/DM), DZ
- Timing: Priced TOE 13:18BST / 14:18CET, FTT immediately
