One day after the S&P broke its near-record winning streak of 7 consecutive all time highs, futures resumed their grind higher as world stocks steadied below recent record peaks, while the Nasdaq jumped to a fresh all time high as the continued drop in Treasury yields supported tech-heavy growth stocks, with investors eyeing today’s June FOMC minutes for clues on policy support going forward. At 730 a.m. ET, Dow e-minis were up 21 points, or 0.06%, S&P 500 e-minis were up 8.25 points, or 0.19%, and Nasdaq 100 e-minis were up 89.25 points, or 0.59%. 10Y yields slipped for the seventh straight session, amid concerns about the economic outlook and coronavirus variants, helping Nasdaq futures rise premarket.

In per-market trading, oil giants Exxon, Schlumberger, ConocoPhillips, Marathon Oil, Occidental and Halliburton Co rose between 0.7% and 3.4%, tracking crude prices, which rebounded after Tuesday’s rout. China’s market regulator said it has fined a number of internet companies including Didi Global, Tencent and Alibaba for failing to report earlier merger and acquisition deals for approval. As a result, the turmoil in Didi (DIDI) shares continued with the stock falling another 4.3%, while Alibaba edged 0.4% higher. Chinese hip-hop promoter Pop Culture Group (CPOP) surges 31% in the latest volatile move since the stock debuted last week. OncoSec Medical (ONCS) shares rally 38% in premarket trading after the firm entered a pact with Merck for a metastatic melanoma treatment trial.

Markets are stabilizing after Tuesday’s mini drop, which was sparked by concerns about the outlook for the global economy as new virus variants emerge, which sent 10Y yield plunging. Investors are taking some heart from soft U.S. data that suggests the Fed will continue offering monetary support for now. But with global stocks near all-time highs and inflationary pressures in focus, they’ll pay close attention to the wording of the minutes from the central bank’s last meeting for clues on the policy path.

“Signs that the recovery is not too hot nor too cold imply that policy normalization could be very gradual,” Credit Agricole CIB strategists led by Jean-François Paren wrote in a note. “This supports our view that while the Fed will discuss tapering from the upcoming meetings, the actual tapering is unlikely to start before next year.”

The Fed minutes, due at 2 p.m. ET, are expected to offer clues on how the U.S. central bank may begin to pare its large bond-buying program amid signs of quickening economic recovery. Wall Street has been concerned over runaway inflation, with investors moving between economy-linked value stocks and growth names in the past few sessions, however in recent weeks sentiment has pulled a U-turn and markets are suddenly more concerned about stagflation and/or outright deflation – judging by asset prices – even as actual prices continue to soar.

“If the minutes are really pushing towards tapering, we are going to see gold rise, the dollar rise and equities fall,” said Giles Coghlan, chief currency analyst at HYCM.

The MSCI world stocks index was little changed at 723.52, after hitting a record high of 726.11 early on Tuesday.

The Stoxx Europe 600 Index climbed, led by gains in technology shares following the Nasdaq 100’s rise to a record on Tuesday. German stocks rose 0.83% and Britain’s FTSE 100 was up 0.5%. Commodity sectors outperformed, with Royal Dutch Shell Plc rising more than 3% after saying it will boost returns to shareholders. German industry output fell 0.3% month-on-month in May, below analysts’ expectations, data on Wednesday showed.

“Slowing economic momentum in Germany and the euro zone would point towards the ECB considering a tapering of its asset purchasing programme as part of PEPP (Pandemic Emergency Purchase Programme) at an even later stage than expected, in particular against the background of the spreading Delta variant,” Commerzbank analysts said in a note.

Earlier in the session, Asian equities declined, hurt by China’s widening corporate crackdown and a selloff in cyclical shares. Tencent and Alibaba were the biggest drags on the MSCI Asia Pacific Index, while the Hang Seng Tech Index fell for a sixth straight day. The losses came after China issued a warning to its biggest firms, vowing to tighten oversight of data security and overseas listings. “With the tightening oversight, it’s difficult for Chinese tech stocks to have a short-term rebound,” said Steven Leung, executive director at UOB Kay Hian (Hong Kong) Ltd. “Even though tech companies in China have been under that kind of regulation for a quarter or even half a year, regulators won’t walk away.” The deepening selloff in Chinese tech stocks comes as Asian equities continue to lag their peers in the U.S. and Europe this year. That’s even as the MSCI Asia Pacific Index capped a fifth straight quarter of gains last week. The regional benchmark is down about 1.3% so far in July. Consumer discretionary and financials were the worst-performing sectors on the Asian gauge Wednesday. Equity gauges in cyclical-heavy markets of Singapore and Japan were the biggest losers in the region, with the Straits Times Index falling as much as 1.8%. China’s stock benchmark rose. The S&P 500 slipped Tuesday, snapping its seven-day winning streak. Treasury yields also dropped

In rates, 10Y Treasury yields were steady after hitting February lows in U.S. hours, while those on core European bonds dipped. Treasury 10-year yields around 1.348% are little changed from Tuesday after falling as low as 1.328%; 10-year bunds outperform by ~1bp while gilts keep pace; curve maintains Tuesday’s bull- flattening move. Treasury yields were mixed but within 1bp of Tuesday’s closing levels after having erased losses incurred during Asia-session. As bunds continued to outperform over the European morning, U.S. 10-year yield reached a four-month low. Focal point for U.S. session is 2pm ET release of minutes of June FOMC meeting which catalyzed aggressive flattening in the yield curve: the minutes will be searched mainly for clues about the eventual pace and timing of QE tapering

In FX, the Bloomberg Dollar Spot Index drifted after rising 0.4% on Tuesday, the most since June 17; most Group-of-10 currencies were steady or inched higher following yesterday’s broad losses against the greenback and the euro hovered in a narrow $1.1812-1.1834 range. Expectations of a hawkish Fed tone helped the dollar rally against a basket of currencies to 92.541, up from a low of 92.003 on Tuesday and moving towards recent three-month highs. The euro steadied at $1.1819, near its lowest in three months, after data on Tuesday showed investor sentiment in Germany fell by much more than expected in July. The pound was little changed, stabilizing after its swings on Tuesday, with focus on how the U.K. will deal with spread of the coronavirus as it eases restrictions. The Kiwi led gains as Westpac joined ASB and BNZ in forecasting rate hikes starting November; Australian and New Zealand bonds rose, tracking an overnight rally in Treasuries and losses in Asian shares. The yen lead losses, falling back from a two-week high as a decline in U.S. Treasury yields halted in Asian trading.

“The markets are looking for some clarity but we are not holding our breath,” said Ned Rumpeltin, European head of currency strategy at TD Securities. “Strategic ambiguity on the Fed’s part is probably where they are best served.”

In commodities, oil prices rose in New York, recouping some of the previous day’s losses, as prices remained volatile while an impasse prevents OPEC+ from boosting output. Saudi Energy Minister said there is no similarity between the situation OPEC is in now compared to March last year, while he added that the current agreement will remain in place, according to Energy Intel’s Bakr.  Spot gold and silver are firmer this morning experiencing a similar level of consolidation where gold has, once again, reclaimed the USD 1800/oz mark. Such upside comes amid somewhat mixed but relatively contained USD performance while the US yield curve is, for the most part, subdued and likely lending support to the metal. Elsewhere, base metals remain supported this morning amid reports that China has completed the release of copper, aluminium and zinc from their State reserves. However, participants remain attentive to the signalling that releases will continue from national reserves in the near-term.

To the day ahead now, and the highlight will likely be the release of the FOMC minutes from the June meeting, whilst the main data highlight is the US job openings data for May. Otherwise from Europe we’ll get German industrial production and Italian retail sales for May, and the European Commission will be publishing their latest economic forecasts. Finally, the Fed’s Bostic will be speaking.

Market Snapshot

• S&P 500 futures up 0.1% to 4,338.50
• STOXX Europe 600 up 0.5% to 458.24
• MXAP down 0.4% to 205.22
• MXAPJ down 0.2% to 687.43
• Nikkei down 1.0% to 28,366.95
• Topix down 0.9% to 1,937.68
• Hang Seng Index down 0.4% to 27,960.62
• Shanghai Composite up 0.7% to 3,553.72
• Sensex up 0.2% to 52,970.67
• Australia S&P/ASX 200 up 0.9% to 7,326.85
• Kospi down 0.6% to 3,285.34
• Brent Futures up 0.8% to $75.09/bbl
• Gold spot up 0.5% to $1,806.09
• U.S. Dollar Index little changed at 92.54
• German 10Y yield fell -1.0 bps to -0.278%
• Euro little changed at $1.1822
• Brent Futures up 0.8% to $75.09/bbl

Top Overnight News from Bloomberg

• European Union officials markedly raised their outlook for the euro-area economy and said there’s a higher risk of inflation taking hold as loosening virus restrictions allow demand to snap back. The European Commission increased its growth forecast for the currency bloc to 4.8% from 4.3% previously, while predicting better performance in 2022 too
• Labor markets in developed nations have recovered only half of the loss of employment they suffered in the pandemic, with the young and low-skilled hurt most. That’s the conclusion of a 400-page study by the Organization for Economic Cooperation and Development
• As soon as OPEC+ negotiations fell apart on Monday, stoking fears of a supply squeeze and sending oil prices soaring, U.S. shale executives began hitting the phones to lock in prices for the oil they plan to produce next year and protecting themselves against a potential market slump
• U.K. house prices fell for the first time in five months in June, an indication the property market may have lost momentum as a tax incentive was due to come to an end
• China, the world’s top commodities consumer, pledged to release more base metals from its state reserves after completing a first batch of sales in its latest effort to rein in surging raw material costs
• India’s central bank may signal the start of a normalization of its accommodative monetary policy at its August meeting amid accelerating inflation and risks from surging oil prices, according to ICICI Prudential Life Insurance Co.
• The longest slump in Asia’s riskiest bonds in almost three years is starting to attract investors who see increasing value in some of the securities. Average prices of high-yield dollar notes from Asian issuers have continued to decline this week after tumbling for five straight weeks in the longest such stretch since November 2018, according to a Bloomberg Barclays index
• Futures on China’s 10-year benchmark debt surged by the most since December after a former central bank official called for the People’s Bank of China to cut interest rates in the second half of the year to safeguard the economy’s recovery and create policy room to deal with the Federal Reserve’s future tightening
• A gauge of Chinese technology stocks traded in Hong Kong fell as much as 1.9% on Wednesday to approach its lowest level since November. The index has slumped more than 30% since its February high, while a measure of Chinese American depositary receipts tumbled 3% on Tuesday. Didi Global Inc., which is the focus of a cybersecurity probe, sank 20% in New York

Quick look at global markets courtesy of Newsquawk

Asian equity markets traded subdued after the similar picture in global counterparts as risk appetite was dampened by China crackdown concerns and soft US ISM data, with the recent slump in oil prices amid OPEC uncertainty, and looming FOMC Minutes adding to the cautiousness. This resulted in most major US indices finishing in the red although growth and tech were underpinned by the lower yield environment to lift the Nasdaq to fresh record highs. ASX 200 (+0.9%) bucked the trend to reclaim the 7,300 level despite the announcement of a lockdown extension in Sydney for a third week, as the index was buoyed by strength in tech which found inspiration from Wall St counterparts whilst the largest weighted financials sector was also kept afloat. Nikkei 225 (-1.0%) was pressured by the weight of currency inflows and ongoing COVID-19 concerns with Osaka also seeking an extension of the quasi-emergency restrictions, while KOSPI (-0.6%) was subdued with index top component Samsung Electronics failing to benefit from better-than-expected preliminary Q2 results as the virus situation clouded over investor sentiment after daily infections increased by over 1,200 which was near South Korea’s record high. Hang Seng (-0.4%) and Shanghai Comp. (+0.7%) were mixed amid China crackdown concerns after its cabinet announced it will take tough action on illegal activities in the securities market and will step up regulation of Chinese firms listed abroad. In addition, the NDRC announced enhanced security checks for buildings taller than 100 metres and stated that construction of skyscrapers with a height of 500+ metres will not be approved, while losses in Hong Kong were exacerbated by pressure in the large oil names, weakness in Geely Auto after its sales dropped 9% and with Tencent suffering from the increased Beijing tech scrutiny which pressured its shares to a YTD low. Finally, 10yr JGBs tracked the advances in T-notes which had been spurred by haven flows and weak data to push the US 10yr yield to its lowest since February. The BoJ were also present in the market today for over JPY 900bln of JGBs and although it slightly reduced purchases in 5yr-10yr maturities, this was inline with its previously flagged buying intentions for Q3.

Top Asian News

• Japan Expected to Deliver at Least $180 Billion in New Stimulus
• Nike Shares Lose Out to China Rivals After Xinjiang Accusations
• China Imposes Penalties on 22 Antitrust Cases in Internet Sector
• Modi Set to Revamp Cabinet to Repair Popularity Ahead of Polls

European equities (Stoxx 600 +0.4%) trade on the front-foot in an attempt to claw back some of yesterday’s losses with fresh macro drivers otherwise relatively light. The attempted rebound can be observed via sectoral performance in the region with today’s gainers predominantly comprised of yesterday’s pro-cyclical laggards as Basic Resources and Oil & Gas sit near the top of the pile in the Stoxx 600. That said, Tech names remain on a firm footing on both sides of the pond with NQ (+0.5%) outpacing its US counterparts (ES +0.1%, RTY U/C). Today’s docket is a relatively light one with the main highlight being the release of the FOMC minutes from the June meeting. Expectations are for the account to reflect the common view that tapering discussions should begin in the coming meetings. Elsewhere in Europe, Travel & Leisure names lag peers despite reports suggesting that UK ministers are set to sign off on a plan that would permit people to travel from amber-list nations without having to isolate for up to ten days. Concerns over the Delta-variant continue to persist with FT research highlighting that holiday-hot spot Spain’s COVID-19 rate is the highest in mainland Europe amid mounting infections amongst younger, unvaccinated people. Individual movers include SAP (+3.7%) who are benefiting from the broad strength in tech and a broker upgrade at BofA and accompanying price target upgrade to EUR 150 from EUR 92. Shell (+2.2%) sits at the top of the FTSE 100 after announcing that it will be moving to the next stage of its capital allocation framework and, subject to approval, increase shareholder distributions to 20-30% of CFFO from the Q2-report.

Top European News

• Euro-Area Outlook Raised by EU With Warning on Inflation Risks
• Payments Firm Wise’s Listing Boosts U.K. Tech Hub Ambitions
• U.K. House Prices Fall First Time Since January, Halifax Says
• Renishaw Calls Off Sale Over Lack of Suitable Proposals

In FX, some calm and consolidative trade after Tuesday’s frenetic session when the Greenback was grounded early on, but staged a dramatic recovery on a combination of factors including safe-haven demand amidst pronounced risk aversion in several asset classes and a deep pull-back in crude prices from new multi-year peaks. The index remains anchored around 92.500, though considerably more contained for now between 92.606-462 parameters compared to 92.665-003 extremes yesterday and the Dollar is more mixed vs major and EM peers as broad sentiment improves. Ahead, weekly mortgage applications and Redbook sales before JOLTS, the FOMC minutes and another speech from Fed’s Bostic.

• NZD/AUD – Still a long way to go for full redemption, but the Kiwi and Aussie have both clawed back some lost ground against their US rival to leave the former on a firmer footing above 0.7000 following ANZ joining others now looking for the RBNZ to begin tightening in November. Meanwhile, the latter is probing 0.7500 again irrespective of a slowdown in AIG’s services index and a softer PBoC Cny midpoint fix overnight, but could be capped by hefty option expiry interest from the round number to 0.7505 in 1.3 bn.
• CAD/NOK/RUB/MXN – The Loonie and Norwegian Krona along with fellow petro currencies like the Russian Rouble and Mexican Peso are looking a bit more composed following the aforementioned oil spill that hit them especially hard on Tuesday, as WTI and Brent bounce off lows approaching Usd 73/brl and Usd 74/brl respectively. Usd/Cad is straddling 1.2450 after rebounding to within a whisker of 1.2500 and looking towards Canada’s Ivey PMIs for further impetus, while Eur/Nok is back under 10.3100 with extra incentive via much stronger than expected monthly mainland growth and an acceleration in GDP overall. Elsewhere, Usd/Rub has retreated through 74.4000 and Usd/Mxn is eyeing 20.0000 again.
• CHF/EUR/GBP/JPY – All narrowly mixed vs the Buck, as the Franc pares declines from circa 0.9251 and Euro meanders inside some decent technical levels in the form of a Fib retracement at 1.1837 and an effective 1.1808-7 double bottom, while the Pound pivots 1.3800 after topping out precisely halfway within its recent range, at 1.3815 and feeling some pressure from RHS demand in Eur/Gbp. Elsewhere, the Yen has handed back some gains after breaching 110.50, but not sustaining momentum to clear late June highs convincingly with Usd/Jpy hovering near 107.80 in advance of Japanese trade and current account data tomorrow.

In commodities, WTI and Brent have continued to consolidate from the losses seen in yesterday’s session after the initial rally fizzled out amid the broader risk tone and lack of OPEC+ developments; benchmarks posting gains in excess of USD 1.00/bbl at present. Updates on the OPEC+ front remain few and far between; however, as the current agreement runs until month-end the UAE and Saudi/Russia still have over 3-weeks to come to an agreement. ABN AMRO’s scenario analysis has a 50% chance of OPEC+ coming to an agreement before August, 30% probability that OPEC+ is dissolved as there is no deal and the remaining 20% to the current agreement being extended. For these scenarios respectively the bank says prices would ‘fall’, ‘fall sharply’ and rise significantly to at least USD 86-87/bbl. OPEC aside, attention has recently turned to reports of drone/rocket attacks on two US bases in Syria and Iraq, details around this are sparse but initial indications are that the attack at the Syria, al-Omar oil field have been successfully intercepted – thus far, crude is unreactive to this. Turning to metals, spot gold and silver are firmer this morning experiencing a similar level of consolidation where gold has, once again, reclaimed the USD 1800/oz mark. Such upside comes amid somewhat mixed but relatively contained USD performance while the US yield curve is, for the most part, subdued and likely lending support to the metal. Elsewhere, base metals remain supported this morning amid reports that China has completed the release of copper, aluminium and zinc from their State reserves. However, participants remain attentive to the signalling that releases will continue from national reserves in the near-term.

US Event Calendar

• 7am: July MBA Mortgage Applications -1.8%, prior -6.9%
• 10am: May JOLTs Job Openings, est. 9.33m, prior 9.29m
• 2pm: June FOMC Meeting Minutes

DB’s Jim Reid concludes the overnight wrap

Let’s make no bones about this, this is a blatant attempt at getting as many votes as possible. The latest Institutional Investor’s Global Fixed Income Research Rankings has now begun. It is a very competitive landscape and we’d like to do as well as possible. It’s the Oscars for the research world and I need to see if I can still get in my virtual tuxedo after lockdown.

So if you value our research we would really appreciate you voting. The main categories you can vote for me are in this pdf (link here). The most important in Europe are Cross Asset Strategy, Fixed Income Strategy, HY Strategy and IG Strategy. In the US its Cross Asset Strategy. Everyone should be able to also vote in Global categories where I’m up for Macro Strategy and also Economics. The pdf should explain how to vote but in short voters should go to https://voting.institutionalinvestor.com/surveys. First time users will sign up with their professional email address using the link on the top right corner and an email will be sent to verify their email. New users can request a ballot after verifying their email address. After verifying their email, users already in the Institutional Investor database as an eligible voter will be able to see the survey. Very many thanks for all your support. Let me know if you’ve managed to vote or have difficulties.

Hopefully you’ll still vote if I tell you’ve I’ve no idea what’s happening in Treasuries at the moment. Is it the slightly weaker than expected data being extrapolated out, the delta variant, or is it technicals? Or is it a combination? Indeed the big story yesterday was the very surprisingly (to me anyway) strong rally in US bonds with 10yr yields down -7.6bps to 1.348% by the close. That left the 10yr yield at a 4-month low as both real rates (-6.4bps) and inflation expectations (-1.3bps) drove the decline, and also follows on from the 5 successive moves lower we saw last week. A turnaround in oil prices and a weaker than expected US ISM seemed to be the catalyst. There was a similar rally on this side of the Atlantic too, with yields on 10yr bunds (-5.8bps), OATs (-5.9bps) and BTPs (-6.1bps) all falling back. And finally, flatter yield curves were another big theme yesterday, with the 2s10s curves in both the US (-6.0bps) and the UK (-7.4bps) hitting 4-month lows of their own.

As all that was going on, it was another topsy-turvy day for oil, which as we discussed yesterday could equally likely react well or badly to the collapse of the OPEC+ meeting. It either means no supply increases in August (bullish) or lots of fresh supply (bearish) if countries eventually see the break up as a terminal blow to the alliances’ strict supply agreements. We drunk from both sides of the well yesterday with oil initially higher (Brent crude +0.9%, WTI +2.4%) in the morning London session, and WTI futures at their highest levels since November 2014, before collapsing into the NY open and eventually closing (Brent crude -3.41%, WTI -2.38%) just off their lows of the day. This was the biggest daily fall since mid-May for both Brent crude and WTI futures.

For equities the picture was more mixed, with the S&P 500 (-0.20%) falling back from its all-time high on Friday, however the intraday moves were somewhat worse with the S&P down as much as -0.87% at one point on the back of losses in cyclical industries. Energy companies led the declines as oil prices moved sharply lower, whilst other cyclical industries underperformed including financials, materials and industrials. Tech firms were a bright spot with the NASDAQ outperforming the S&P and finishing up +0.17%. Meanwhile US small caps were the true underperformer as the index fell -1.36%, which took their YTD performance (+15.17%) back under the S&P 500’s (+15.64%). For further perspective, the marginal S&P 500 loss was only the index’s first daily decline in the last 8 sessions and the S&P and NASDAQ have only recorded two daily declines since June 18. Over in Europe, the STOXX 600 (-0.52%), the DAX (-0.96%) and the CAC 40 (-0.91%) all witnessed even larger losses than the US.

The market had started to turn lower before the US services ISM, but a slightly weaker outcome than expected seemed to accelerate the move. It came in at a weaker-than-expected 60.1 (vs. 63.5 expected). In fact, the decline of -3.9pts on the previous month was actually the biggest monthly decline since the height of the pandemic last year, though the reading is still above its levels throughout all of 2019 and 2020, so this is hardly a move towards contraction. June’s reading is also still the 11th highest reading in the 24 year history of the series – the top three readings are March, April and May of this year. To be fair on the downside, the employment component did fall sharply to 49.3, marking the first time it’s been below 50 this year, but even there that was inconsistent with the +642k services jobs produced in June that we saw in Friday’s jobs report. So we might have to wait until next week to get a better picture, when some of the hard data for June comes out like industrial production and retail sales. The anecdotes within the report were still quite supportive with lots of quotes of how strong demand was being held back by supply issues and prices. So these reports are all very confusing at the moment.

Staying with macro/economic issues, yesterday we released the latest edition of The House View, which is an easy-to-read slide pack of all of Deutsche Bank’s macro and strategy views. Since the last edition in late May the global recovery has continued to motor along as expected, but the balance of risks have moved in a slightly more negative direction thanks to the delta variant and the FOMC reaction. You can read the report here.

Sentiment has failed to improve in Asia this morning with the Nikkei (-0.91%), Hang Seng (-0.74%) and Kospi (-0.63%) all taking a leg lower. In contrast the Shanghai Comp is up +0.44% alongside other Chinese bourses. Looking at sovereign bond yields, those on 10y USTs are up +1.2bps thereby offsetting a small part of yesterday’s decline but yields on Australian and New Zealand 10y bonds are down -8.8bps and -6.3bps respectively after being higher yesterday before the global yield falls. Futures on the S&P 500 (-0.02%) are broadly flat while those on Stoxx 50 are up +0.17%. Elsewhere oil prices are largely unchanged.

In terms of the latest on the pandemic, the number of UK Covid-19 cases hit its highest so far of the latest wave, at 28,773, which comes as the government remain on track to lift pretty much all the remaining restrictions in England on July 19. The new health secretary even warned that cases could jump to 100k per day as we open up over the summer. One bright spot however was that the weekly growth rate in cases fell once again, now standing at +49% above the previous week, which is down from the peak of +74% we saw last Friday. Elsewhere Germany is set to relax travel restrictions on those coming from the UK and Portugal among others as overall cases counts recede. Meanwhile in Australia, the city of Sydney has extended its lockdown which was due to end on Friday by one more week as it hasn’t yet brought the spread of the delta variant under control. South Korea has also said that it may raise its virus alert level if the latest surge isn’t contained in the next two or three days. The country has reported 1,212 new cases, the highest daily number in almost seven months. Sticking to Asia, Myanmar has reported 3,602 new infections in the past 24 hours, its highest single day increase since the pandemic began.

Looking at yesterday’s other data, German factory orders unexpectedly fell by -3.7% (vs. +0.9% expected), which in light of the upward revision to April’s reading marks the first decline of 2021 so far. The slump was driven by a decline in foreign orders (-6.7%), in contrast to domestic orders which were up +0.9%. We also had the latest ZEW survey, which saw the expectations measure decline to its lowest since January at 63.3 (vs. 75.2 expected). Finally, Euro Area retail sales grew by +4.6% in May (vs. +4.3% expected).

To the day ahead now, and the highlight will likely be the release of the FOMC minutes from the June meeting, whilst the main data highlight is the US job openings data for May. Otherwise from Europe we’ll get German industrial production and Italian retail sales for May, and the European Commission will be publishing their latest economic forecasts. Finally, the Fed’s Bostic will be speaking.