OAT: Sell-Side Remain Cautious On OATs

Of note:

EURUSD 1.65bn at 1.1650 (a bit far).

USDJPY 1.24bn at 149.00 (wed).

USDCAD 1.7bn at 1.3770/1.3775 (wed).

AUDUSD 1.01bn at 0.6550 (wed).

EURUSD 1.81bn at 1.1600 (thu).

AUDUSD 1.38bn at 0.6600 (thu).

• EURUSD: 1.1500 (629mln), 1.1550 (680mln), 1.1600 (862mln), 1.1650 (1.65bn).
• USDJPY: 148.00 (430mln), 148.50 (317mln), 148.75 (277mln), 149.00 (322mln).
• USDCAD: 1.3715 (365mln), 1.3770 (540mln).
• AUDUSD: 0.6600 (966mln).

Spain continues to cement itself as the post-covid Eurozone growth engine, with Q2 flash GDP growing 0.7% Q/Q (vs 0.6% cons and prior). Sequential growth has been above 0.6% for the last eight quarters.

• Domestic demand was solid in Q1, contributing 0.9pp. External demand was a modest drag to the tune of 0.1pp.
• Household consumption rose 0.8% Q/Q, after slowing a little to 0.5% in Q1. This is consistent with the solid growth in retail sales and improvement in consumer confidence seen through Q2. Meanwhile, Spain’s record low unemployment rate will also be providing a tailwind to consumption.
• Gross fixed capital formation rose 1.6% Q/Q (vs 1.9% prior), while Government consumption was -0.1% Q/Q (vs -0.5% prior). Exports rose 1.1% Q/Q (vs 1.7% prior) while imports grew 1.7% Q/Q (vs 1.5% prior).
• On the production side, industry grew 0.8% Q/Q, while services saw more impressive 1.2% Q/Q growth. The services PMI was in expansionary territory through Q2.
• Hours worked rose 0.3% Q/Q, while real productivity per hour was 0.5% Q/Q. We wrote last week that Increased employment rates, and by extension hours worked, has been a key driver of Spain's economic outperformance post-covid. Importantly, this has also come alongside improving real productivity metrics.

• MNI: UK JUN M4 MONEY SUPPLY +0.3% M/M, +3.3% Y/Y