- Eurozone inflation data due Tuesday 31 May 2022 - HICP preview
- China's Foreign Minister Wang says relationship with the US cannot continue to deteriorate
- Shanghai official says the city is returning to normal
- Tuesday Biden meetings: NZ PM Ardern, Powell & Yellen, then Korea's BTS (the boy band)
- China's PMIs improved in May but both manufacturing and services remained in contraction
- Australia data - Q1 current account balance AUD 7.5bn (expected 13.4bn, prior 12.7bn)
- Australia data - Building Approvals for April -2.4% m/m (vs. expected 2.0%)
- Australia data - Private Sector Credit for April +0.8% m/m (prior 0.4%)
- China May PMIs Manufacturing 49.6 (expected 48.0)
- PBOC sets USD/ CNY central rate at 6.6607 (vs. estimate at 6.6621)
- NZ data, May: Business confidence -55.6 (prior -42.0) & Activity -4.7 (prior 8.0)
- Japan retail sales April +0.8% m/m (prior +1.7%) & +2.9% y/y (expected +2.6%, prior +0.7%)
- Japan preliminary industrial production for April -1.3% m/m (expected -0.2%)
- Japan unemployment rate (April) 2.5% (vs. expected 2.6% and prior 2.6%)
- US President Biden writing in the Wall Street Journal - "My Plan for Fighting Inflation"
- Australian weekly consumer confidence 90.7 (prior 90.8)
- UK business confidence improved a little further in May, to 38 from 33 in April
- New Zealand Building Permits for April -8.5% m/m (vs. prior +5.8%)
- EU's von der Leyen on EU agreement to cut 90% of Russian oil to the EU
- European Union leaders have agreed to some oil being included in further Russia sanctions
- ICYMI - Fed's Waller said Fed's credibility is its tool for fighting inflation. Uh-oh.
- BTC/USD popped above US$32K
- Pacific Island countries have not agreed to region-wide trade and security deal with China
- Trade ideas thread - Tuesday 31 May 2022
- RBNZ's Hawkesby say the Bank needs to keep reducing stimulus
- Australia election update - majority government now expected
- Rocket attack on airbase in Iraq.where US coalition is based
Early news flow during the timezone was that EU leaders had agreed to oil sanctions on Russia. In brief (see bullets above for more):
- the ban on Russian oil exempts oil that comes through pipelines - this allows dependent states (basically Hungary) to continue importing
- shipped (sea-borne oil imports) Russian oil, accounting for 2/3 of EU imports, will be banned
- Germany and Poland will stop oil imports via the Druzhba pipeline by the end of the year
The price of oil has continued to gain right through the session. As I post WTI futures are above $118.
The data focus for the session were the China PMIs for May. These are the official PMIs (the privately surveyed PMIS will follow in the days ahead this week). The results showed improvement but both manufacturing and services (and the composite, of course) remained under the 50 point to be in contraction:
Manufacturing 49.6
- expected 48.0, prior 47.4
Services 47.8
- expected 45.2, prior 41.9
Composite 48.4
- prior 42.7
(See bullets above for more).
We also had a data dump from Australia. Tomorrow brings Q1 GDP data. The ‘partials’ so far leave a contraction in GDP a possibility for Q1, but today’s inventory data showed a very strong gain – this will be a big positive input to the GDP calculation and looks very likely to ensure GDP did not contract in January – March.
As a heads up, there is further inflation data coming up out of Europe today (0900 GMT):
Also, during US time, US President Biden meets with Powell and Yellen in the Oval Office to discuss inflation. That’s at 1.15pm Washington time (1715 GMT)
FX rates had swings during the session, characterised by strengthening for the US dollar. EUR, yen, GBP, AUD, CHF, NZD, CAD all lost ground against the big dollar. CAD found some support from the rising oil price, which kept its loss against the USD subdued. If you scan through your charts you'll see rebounds for all of those I have mentioned, but none have retraced fully, some not much at all.
Oil:
