After a quiet start the US treasury market reacted positively to the empire manufacturing number which did more than reverse April’s spike, being led down by shipments and new orders. Of more concern was the slump in capital spending intentions.
Fed's Bostic doesn't expect rate cuts until "well into 2024". He (I am not going to get into the pronoun debate) will be speaking again today, as will Logan, Williams, Bostic, Mester and Hoolsbee. We also get US retail sales and Industrial Production
Today APAC sees the RBA minutes following the 25bp hike. The market will be looking for clues about how close (or not) the RBA might be to another hike as early as June. China releases retail sales, IP and property investment for April.
Asia investment grade continues to grind tighter in the absence of new issues. Names such as State Grid Corp of China (CHGRID) and CNOOC are trading at historic tights with no sellers in sight. China high yield remains under pressure. and has pulled NWDEVL down another 2-3pts in its wake.
Europe will thrill the market with Eurozone Q1 GDP, consensus is for 0.1%qoq. Lagard and Makhlouf will be contributing some ECBSpeak. The UK unemployment rate should remain at 3.8%.
Argentina consumer prices were up 8.4% m/m in April, the highest monthly level in two years. Inflation increased 32% through Q1 and reached 108.8% y/y in the last 12 months. Economy Minister Sergio Massa raised interest rates to 97%, eliminated tariffs on food imports. The government is approaching China to discuss further usage of the bilateral credit lines. Blame for the surge in inflation is being levelled at the increased government expenditure due to VP Cristina Kirchner’s social programs.
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