top of page

30/05/22 Briefing

Germany (14:00 CET) CPI for May expected at 7.6% YoY

Market News

EU ambassadors are scheduled to meet again today ahead of a leaders' summit to discuss a revised package of Russian sanctions. This after the bloc failed to reach a compromise yesterday in the face of Hungarian resistance. One proposal bans seaborne oil from Russia while ensuring its crude supplies keep flowing via a key pipeline. Budapest is now demanding further concessions.

European and Asia stocks rose, after China eased some virus curbs. US contracts climbed in a sign the bounce may have further to run. The dollar slipped against major peers as havens lost their appeal. Brent traded around $120. Cash Treasuries won't trade in Asia because of a US holiday.

Boris Johnson faces hurdles as he tries to move on from Partygate. A YouGov poll signaled that if elections were held today, he'd risk losing his seat and the Tories would hold only three of 88 battleground seat. Still, a Sky News tally shows only 24 Tory MPs have called for a confidence vote, well short of the 54 needed to trigger a ballot.

Russia is developing a way to pay its Eurobond debt that would sidestep the western financial infrastructure, Finance Minister Anton Siluanov told Vedomosti. Volodymyr Zelenskiy made his first known foray outside of Kyiv since the invasion, visiting front-line positions. Zelenskiy said he fired the head of Ukraine's security service in the Kharkiv region, saying he hadn't been trying to protect the city. Vladimir Putin spoke with Emmanuel Macron and Olaf Scholz, who urged him to lift the blockade of Odesa and allow Ukrainian grain to be exported via the Black Sea.

Shanghai unveiled a 50-step aid package that includes tax rebates and allowing manufacturers to resume operations in June. The city will also speed approval of property projects, raise the car ownership quota and ease testing mandates for public places. The majority of 540 participants in the MLIV Pulse survey prior to the latest easing don't expect China to end its Covid-zero strategy this year.

Retailers' next big challenge may be selling all their stuff. Companies including Walmart, Gap and Target saw inventories balloon $44.8 billion in the latest quarter, up 26% from a year ago, after rushing to stock supply amid soaring demand and logistical woes. While that may help if port congestion worsens again, they're now contending with changing consumer tastes, putting them at risk of being left with a glut of merchandise people don't want.

The battery metals bull market is over for now. So says Goldman, which expects prices of cobalt, lithium and nickel to drop in the next two years after investors wanting exposure to the green-energy transition piled in too quickly. Lithium will average under $54,000 a ton this year - down from a spot price of over $60,000 - before falling further to just over $16,000 in 2023, it predicts. Prices could soar again after 2024.

Grounded. More than 5,000 flights were canceled in the US over the long weekend, the AP reported. Delta blamed bad weather in addition to Covid-related staff shortages. And analysts aren't predicting much of a recovery in travel shares. A global index of airline stocks remains more than 30% lower than early 2020, failing to match the broader market's recovery.

The pound has gained for two weeks, ending a month of losses, but some analysts think another period of reckoning is likely as pressure on Britain's companies continues to build. "Overall the UK's vulnerable position in terms of exposure to a slowing Europe and China, more dovish central bank and weak balance of payments suggests to us the path for pound-dollar is lower towards $1.20," said Nomura's Jordan Rochester.

Economic Outlook

Inflation watch. Consensus says Germany's EU-harmonized CPI growth accelerated to 8.1% in May from 7.8% in April. Bloomberg Economics forecasts 7.9%, with a jump in the core reading to 3.9% driven in part by travel-related services. Inflation in Spain unexpectedly quickened to 8.5% in May, piling more pressure on the ECB to act. In other data, Sweden's first-quarter GDP contracted 0.8% from the prior period, wider than expected.


FTSE 100 - 7,610.02 (0.3111%) DJ - 33,212.96 (1.7642%) S&P500 - 4,158.24 (2.4742%) Nasdaq - 12,131.13 (3.3259%) EStoxx50 - 3,848.58 (1.0284%) HSI - 21,126.51 (2.0475%) Nikkei - 27,369.43 (2.1946%)


GBPUSD - 1.2621 (-0.095%) GBPEUR - 1.1743 (0.2299%) EURUSD - 1.0747 (0.1118%) EURCHF - 1.0299 (-0.2136%) USDCAD - 1.2698 (0.189%) EURAUD - 1.4977 (0.0587%) EURSEK - 10.5089 (0.217%) EURNOK - 10.1579 (0.002%)


GOLD - 1,859.48 (0.2686%) SILVER - 22.1393 (0.0715%) COPPER - 433.55 (0.6734%) PALLADIUM - 2,079.05 (0.5616%) CRUDE - 115.83 (0.6952%) BRENT - 120.04 (0.5191%)

0 views0 comments

Recent Posts

See All


bottom of page