© Reuters. FILE PHOTO: People are seen in a shop front window at the Roosevelt Field shopping center in Garden City, New York, U.S., May 20, 2021. REUTERS/Shannon Stapleton
1/ HIGH WARNING
An important view on inflation is offered with the May US consumer price index.
It is becoming one of the most watched numbers for some time after consumer prices rose by the most in nearly 12 years in April and a debate raged over whether the increase in price pressure was the cause. transient or persistent.
The reading is also one of the last major pieces of economic data ahead of the June 15-16 meeting of the Federal Reserve.
The Fed’s Randal Quarles believes the recent increase in inflation will be temporary. Another strong inflation news that boosted Treasury yields could weigh on valuations for other tech and growth stocks.
– Fed’s Quarles: Still expect inflation to increase temporarily
Rising demand, shortages fuel US inflation
2 / MANUFACTURED IN CHINA
Trade data from across the Pacific will show goods going west from Japan, China and South Korea, and money flowing east, from North America. Updates from the US, Germany and UK are also on the calendar.
Data on Monday showed that China’s imports rose at their fastest pace in 10 years in May, boosted by surging demand for raw materials, although export growth was slower than expected.
China posted a trade surplus of 45.53 billion USD for the month, larger than the surplus of 42.86 billion USD in April which could help to prolong the upward pressure on the yuan.
The coin hit a three-year high against the dollar in May, sparking a wave of protests from policymakers.
Meanwhile, China’s producer price data on Wednesday will show how inflation is exported as mills begin to pass on higher raw material costs to customers.
– China’s banks are flooded with dollars, and that’s a worrisome thing
3 / ECB EQUALITY BEHAVIOR
The ECB meets on Thursday. It must find a balance between the need to support the eurozone recovery through emergency stimulus and accept a brighter outlook that means its PEPP plan may no longer be needed for long. more.
Dovish’s comments suggest that the ECB will continue to buy bonds at the current rate. This view has pushed government bond yields down from multi-month highs in May, the euro steadied, having risen since April.
The possibility of a slowdown in purchases cannot be ruled out, especially as the quiet summer approaches. And any sign from ECB Director Christine Lagarde that the close debate is underway will end the calm in the bond market.
– Don’t mention the letter T: [nL5N2NK3NV]
4 / TAX Debt
Leaders of the G7 economies will meet in the British seaside county of Cornwall, their first face-to-face meeting since COVID-19 and the first with US President Joe Biden .
They reached a landmark deal on Saturday to squeeze more money out of multinationals like Amazon (NASDAQ:) and Google (NASDAQ:) and reduce the incentive to shift profits to low-tax havens. in another country.
Key details on a corporate tax of at least 15% still need to be negotiated in the coming months. How the tax revenue will be divided has also not been finalised, and any agreement will need to go through the US Congress.
Still, Saturday’s deal bodes well for the G7 summit later in the week and is a sign that cooperation between Washington and the rest of the world has improved since Donald Trump’s departure.
– Tech giants and tax havens targeted by historic G7 deal [nL2N2NN05A]
5 / VOTING NUMBERS
Chancellor Angela Merkel’s conservatives won a landslide victory in state elections in eastern Germany on Sunday, boosting Armin Laschet, who hopes to succeed her in national elections on September.
Laschet’s party is standing shoulder to shoulder with Republicans who are skyrocketing in national polls, both of whom hold about a quarter of the vote.
Sunday’s results were disappointing for most other parties, with the Greens coming in at number one in the regional election.
The left-leaning Greens begin their party congress on June 11 and will officially announce Annalena Baerbock as their first prime ministerial candidate. Less formality would complete the ecological party’s electoral manifesto – a guide to what could happen in the immediate future for policy in Europe’s largest economy.
– Conservative victory in German state elections raises hopes of Chancellor Laschet