Macro Wrap

The Caixin/S&P Global manufacturing PMI rose to 50.4 in June from 48.3 in May, driven by jump in new orders, but Employment across the Chinese manufacturing sector contracted in June leading to accumulation of backlogged orders. Overall data is positive for industrial commodities.

The DJIA, the S&P500, and the Nasdaq Composite Index rose 0.6%, 0.5%, and 0.5% respectively. The Eurostoxx 50 fell 0.4%. The Dollar Index fell 0.5% to 96.88 and EUR-USD gained 70 pips to 1.1790. The US 2Y yield fell 3bp to 3.72% and the 10Y yield fell nearly 5bp to 4.23%. Brent crude oil prices fell 0.2% to USD67.61 and gold rose 0.9% to USD3,303.

German May retail sales continued to contract for a second month, at -1.6% m/m (+3.6% y/y) from a revised -0.6% m/m (+4.6% y/y) in Apr. Sentimentally negative for Eruo.

Economic data watch: The key economic data from Europe will be the Eurozone prelim Jun CPI (Bloomberg est 0.3% m/m, 2.0% y/y from 0.0% m/m, 1.9% y/y in May, core CPI at 2.3% y/y same as May) while in the US, will have the May construction spending (Bloomberg est -0.1% m/m from -0.4% in Apr) and the Jun ISM manufacturing (Bloomberg est 48.8 from 48.5 in May).