Written Commentary
Modest day for data: digesting Australia Q1 GDP, Korea CPI, German Retail Sales; awaiting UK lending aggregates and US Auto Sales; Fed Beige Book; plenty of Fed, ECB and RBA speakers and BIS Green Swan conference: UK and German bond auctions
US Auto Sales: setback expected after April surge, seasonals imply scope for larger than expected setback
EVENTS PREVIEW
As is often the case, the second working day of the month is data light, with Australian Q1 GDP (stronger than expected as already flagged by the Inventories and Current Account data), Korea’s CPI, UK BRC Shop Prices (marching higher but still negative) German Retail Sales (much weaker than expected, but this series is unreliable and extremely volatile) and Spanish labour data to digest, while ahead there are only UK credit aggregates, US Auto Sales and Brazil’s Industrial Production. The events schedule is busier with Fed, ECB and RBA speakers, the start of the BIS’ Green Swan conference, Fed Beige Book and Banco de Mexico’s quarterly inflation report, while there are 10 & 25-yr UK and 5-yr German govt bond auctions. US Auto Sales are expected to decelerate after April’s outsized 18.51 Mln SAAR pace to a still robust 17.50 Mln, with adverse seasonal adjustment imparting downside risks along with low inventories due to supply chain issues (above all semiconductor). Otherwise markets appear to be in a doldrums phase, with the focus very firmly on Friday’s labour data even if the Payrolls component will certainly not be decisive in terms of any Fed policy shifts (as underlined by Brainard’s comments yesterday), though today’s Beige Book should offer further evidence on the extent of price pressures due to supply chain bottlenecks and skilled labour shortages. Yesterday’s hack at Brazilian meatpacker JBS also serves as a reminder that cyber security is a large and much underdiscussed risk, with potential to create considerable disruption, as evidenced by the US Colonial pipeline incident.
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ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
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