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Americas Breakfast Briefing


Overnight, Japanese Apr National CPI moderated to 2.5% y/y from 2.7% prior but missed the 2.4% f/c. There is a heavy data calendar ahead, the second half slate brings May final University of Michigan Sentiment which are all expected to be unchanged compared to prior while May Kansas City Fed Services Activity is also due (9 previously). There is another packed central bank speaker calendar including the Fed's Waller. In markets, the S&P shed 0.75% to a 9 day low close on fears the FOMC many keep rates on hold for longer but the futures are up 0.15% in EZ flows. Hang Seng declined for a 4th straight day to a 15 day nadir). Front month WTI futures fell to $76.52brl vs a 3.5mth low at $76.43brl yesterday. Note, the 61.8% Fibo of the 2024 extremes is at $76.30brl. Jun24 US 10yr note futures have traded in a very narrow 3.5 tick range during the European first half with a session nadir of 108-22 compared to Thursday's 10 day base at 108-17+. The US 2-10yr yield spread settled at -45.8bps yesterday(2024 tight) and has steepened just 0.5bps to -45.3bps today, next major target at -53.2bps.

  • The US 5/30yr spread renews this year's flattening trend via 23.4 (3 May reaction high) to post new six-week lows under 3.4 (1 May trough)
  • Studies turn increasingly negative and initial risk is seen towards -1.0 (10 April trough) and -3.3 (50% retrace of -44.9/38.2 advance)
  • Sustained flattening would then expose -13.1/-15.5 (61.8% retrace of -44.9/38.2 advance and 21 September 2023 higher trough)
  • It would take a return above 11.6/12.5 (50/200DMAs) to delay flattening and allow further short-term steepening towards 23.4


Core EGB futures have traded in very narrow session parameters of sub-1/5pt in Gilts and sub-1/3pt in Bunds. The contracts saw best gains of 1/5-2/5pt with the German contract outperforming their UK peer by 1/5pt at most. The German/UK 10yr yield spread has steepened a fraction on the day but the German & UK 2-10yr yield spread went their separate ways. The former narrowed to a two week tight but the latter steepened almost 2bps. Turning to risky assets, DAX softened to a two week low while FTSE & CAC declined to 2.5 week nadirs. Front month Brent futures matched the 3.5 month trough made on Thursday but looks ready to take another leg lower in due course. There was some official chatter from the ECB's Schnabel who cautioned against moving too fast in interest rates. UK retail sale data made for pretty grim reading as all the various components declined very heavily and significantly missed their consensus forecasts. German Q1 final GDP prints were unchanged as predicted while French May confidence data prints were mixed vs prior but all fell short of market expectations.

  • The German 5/30yr spread flattens within a 7-month falling channel from 47.926 (2023 peak - 1 November) to briefly probe parity and a 17-month rising trendline at -2.057
  • Negative studies suggest continued pressure on the rising trendline and then -4.657 (61.8% retrace of -37.077/47.926 advance/near falling channel base)
  • Decisively below there would expose -10.391 (18 July 2023 trough), perhaps -17.048 (76.4% retrace of -37.077/47.926 advance)
  • A failure under -4.657 may prompt a corrective bounce, but only over 12.439 (3 May high, near 50DMA) relieves for 20.852 (3 April lower peak, near 200DMA)


  • ECB's Schnabel cautioned against moving too fast on rates
  • Schnabel: some elements of inflation proving persistent
  • UK Apr Retail Sales dumped to -2.3% m/m from -0.2% prior vs -0.5% f/c
  • ...& ex-auto fuel down to -2.0% from -0.6% vs -0.8% expected
  • UK Q1 final GDP metrics were unchanged as anticipated
  • UK Q1 Private Consumption fell to -0.4% q/q from 0.4% vs -0.2% forecast
  • French May Business Confidence unchanged at 99 vs 100 predicted
  • French May Manufacturing Confidence eased to 99 from 100 vs f/c
  • German Q1 final GDP prints unchanged as expected
  • German Q1 Private Consumption fell to -0.4% q/q from 0.4% vs -0.2% f/c
  • German 2-10yr yield spread narrows to 5wk tight
  • US 2-10yr spread flattened to 5 month tight
  • UK 2-10yr spread bucked the bias, steepened 1.8bps
  • FTSE & CAC extended their 2.5 week nadirs
  • DAX softened to a 2 week trough
  • Brent matched its 3.5 month low made yesterday
  • UK retail sales suffer weather induced slump


Friday, May 24th
05:00SGIndustrial Production (MoM)7.1%Apr5.7%-16.1%
05:00SGIndustrial Production (YoY)-1.6%Apr-0.7%-9.2%
05:00FIProducer Price Index (YoY)-2.1%Apr
05:00FIExport Prices (YoY)-3%Apr
05:00FIImport Prices (YoY)-2.1%Apr
06:00DKIndustrial Outlook2May
06:00GBRetail Sales (YoY)-2.7%Apr-0.2%0.4%
06:00GBRetail Sales (MoM)-2.3%Apr-0.4%-0.2%
06:00GBRetail Sales ex-Fuel (YoY)-3%Apr-1.1%0%
06:00GBRetail Sales ex-Fuel (MoM)-2%Apr-0.6%-0.6%
06:00SEProducer Price Index (YoY)0.9%Apr
06:00SEProducer Price Index (MoM)0.5%Apr
06:00DEGross Domestic Product w.d.a (YoY)-0.9%Q1
06:00DEGross Domestic Product (QoQ)0.2%Q10.2%0.2%
06:00DEGross Domestic Product (YoY)-0.2%Q1-0.2%-0.2%
06:30HUUnemployment Rate (3M)4.5%Apr
06:30CHEmployment Level (QoQ)5.484Q1
06:45FRBusiness Climate in Manufacturing99May100100
07:00EMUECB's Schnabel speech

07:00EMUEurogroup Meeting

07:45CHSNB's Chairman Jordan speech

08:00TRForeign Arrivals8.7%Apr
09:00CNFDI - Foreign Direct Investment (YTD) (YoY)
09:15DEGerman Buba President Nagel speech

11:30INFX Reserves, USD
12:00PLM3 Money Supply (YoY)
12:00MXTrade Balance, $
12:00MXTrade Balance s/a, $
12:30CARetail Sales (MoM)
12:30CARetail Sales ex Autos (MoM)
12:30USDurable Goods Orders
12:30USNondefense Capital Goods Orders ex Aircraft
12:30USDurable Goods Orders ex Defense
12:30USDurable Goods Orders ex Transportation
12:30BRCurrent Account
13:35USFed's Waller speech

14:00AEPrivate Sector Loans
14:00AEM3 Money Supply
14:00USUoM 5-year Consumer Inflation Expectation
14:00USMichigan Consumer Sentiment Index
15:00MXCurrent Account, $ (QoQ)
15:00MXAccumulated Current Account/GDP
17:00USBaker Hughes US Oil Rig Count

19:30AUCFTC AUD NC Net Positions

19:30EMUCFTC EUR NC Net Positions

19:30GBCFTC GBP NC Net Positions

19:30USCFTC Gold NC Net Positions

19:30USCFTC Oil NC Net Positions

19:30USCFTC S&P 500 NC Net Positions

19:30JPCFTC JPY NC Net Positions


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