MNI SNB WATCH: Rate Cut On Knife-Edge As Disinflation Stalls

MNI China Daily Summary: Tuesday, June 18

MNI BRIEF: More Steps Needed On Integragted Finc'l Sevices-ECB

MNI: PBOC Net Injects CNY84 Bln Via OMO Tues; Rates Unchanged

CHINA PBOC CONDUCTS CNY86 BILLION VIA 7-DAY REVERSE REPOS TUES

MNI: PBOC Sets Yuan Parity Lower At 7.1148 Tues; -1.35% Y/Y

MNI: US MAY INDUSTRIAL PROD +0.9%; CAP UTIL 78.7%

New Annual CPI Basket Weights Boost Shelter And Transportation

MNI: US REDBOOK: JUN STORE SALES +5.7% V YR AGO MO

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

MNI BRIEF: Poilievre Calls QE 'Scam' And Would Limit BOC Remit

MNI: Growth Drag From Net Zero Carbon Goal Can Be Offset-OECD

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Risk-On

US TSYS SUMMARY
Dire pandemic warnings from CDC director and large dealer losses tied to forced equity unwinds (Archegos fund $20B blow-up continues to trigger massive block sales at several dealers) apparently taken with some reservations Monday. Risk-on tone resumed in second half: Tsy extended sell-off as equities pared losses as equities traded higher.
  • S&P futures tapped 3971.25 -- just off all-time high of 3977.0 on March 17. High yield marks: 10YY 1.7259%, 30YY 2.4238%.
  • Early London hours story that Deutsche Bank may have avoided the forced liquidation pain of fund debacle debatably triggered a sell-off in rates as losses on forced unwinds may not be as bad or as systemic as feared -- despite sporadic reports of large block sales from Morgan Stanley, Wells Fargo, JPM on day.
  • While CDC head warned of "impending doom" over case rise, the surge in the amount of people vaccinated and/or expected to receive tempered those concerns somewhat. Meanwhile, shipping traffic on the Suez Canal resumed as the Ever Given container ship was refloated Monday, ending the expensive back-log of ships (est $10B/day drag on global trade).
  • Eurodollar and Treasury option trade saw renewed interest in low-delta put buying, hedging rate hike risk starting mid-2022 through 2023.
  • Late session: 2-Yr yield is up 0.2bps at 0.1407%, 5-Yr is up 2.1bps at 0.8861%, 10-Yr is up 3bps at 1.7063%, and 30-Yr is up 3bps at 2.4081%.
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