EUROPEAN INFLATION: Spain Upwardly Revised, Symmetrical Revision Risks To EZ
Spain HICP was upwardly revised for May by one tenth to 2.0% Y/Y (1.98% to 2dp, 2.24% Apr). On downside drivers vs April on final national CPI (which was also upwardly revised by 0.1pp), INE flagged leisure and culture (0.5pp lower at 2.2%) as well as housing (0.4pp lower to 3.8%).
- Contrary to the flash release, INE do not explicitly mention transport prices as a downside driver this time - this makes it possible that that category drove the headline upside revision at least to some extent.
Taking broader account of the final releases of the May Eurozone HICP round so far, Germany was unrevised (2.1% Y/Y), while France and the Netherlands saw downward revisions, by 3 and 1 hundredths to 0.59% and 2.94% Y/Y, respectively. This suggests symmetrical but limited risks for a revision to the Eurozone-wide release (scheduled for next Wednesday, June 18) for now - the flash print stood at 1.92% Y/Y.
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EGB SYNDICATION: Belgium New 5-year Benchmark: Spread Set
- EUR Benchmark 5Y Fixed (Oct. 22, 2030) at MS+28 (guidance was MS+30 Area)
- Books above EU42b (including JLM interest): Leads
- Size: MNI expects E7bln size, with downside risks.
- Coupon: Annual, act/act, short first
- Settlement: May 21, 2025
- ISIN: BE0000365743
- Bookrunners: BNPP, Barclays (B&D), Citi, Natixis, SocGen
- Timing: May price today
Details as per Bloomberg
FOREX: Greenback Slides, USD/JPY Further Reverses China Rally
Greenback slipping in recent trade, in a move isolated to currency markets given the relative stability in equities and the front-end of the US curve. Trump is speaking again from Riyadh, however he's repeating most of the themes from his meeting with MBS yesterday (critiquing Iran, talking up relations with Gulf allies).
- EUR/USD shows through overnight levels to hit a new weekly high, but it's USD/JPY that stands out - rate is close to fully erasing the entirety of the China-triggered rally from early Monday morning. Volumes are healthy on the move, with ~12k contracts traded across JPY futures since the turn of the hour - equating to just over $1bln cash notional.
- We don't see the South Korea story as the direct trigger for this greenback weakness, however it is worth noting that the piece doesn't suggest any material pressure on South Korea to reverse FX policy in the earliest iteration of talks.
EURIBOR OPTIONS: Ratio Put Fly
ERH6 98.0625/97.9375/97.8125p fly 1x2.5x1.5p fly, bought for flat in 4.8k.
