Developed macro
1. US data disappointments fail to dent markets amidst better Greek sentiment
2. US: The ISM Manufacturing index to decline in May matching drops in regional manufacturing indices
3. US: ADP employment to point to a slowdown in nonfarm payroll gains
4. US: May auto sales hit with supply chain disruptions from Japan.
5. UK PMI manufacturing to signal slowing growth in Q2 11
6. Australia Q1 GDP is set to decline
Interest rate strategy
1. The improvement in Euro-sentiment is clear but the 3% level has not yet been shaken off
2. If today’s OAT supply weighs on the market, look for Bunds to bear the brunt
3. Technically the 10Y Bund has potential for weakness, with the MACD forest warning the corrective rally is close to ending
FX strategy
1. GBP: Money supply and PMI to lend further pressure.
2. USD: Renewed traction from labour data.
3. CHF: Weaker sales an “early warning sign”.
4. EUR/USD: Still bullish on a weekly and monthly basis
Emerging markets
1. EM manufacturing PMIs to confirm soft patch in growth.
2. Inflation to fall or stabilize in Korea, Indonesia and Thailand, while trade positions to weaken in Korea, India and Indonesia, reducing scope for rate hikes.
3. Thailand will still increase its key rate by 25 bps.
Commodity markets
1. End month window dressing boosts gold and silver.
2. Base metals buoyed by evidence of supply constraints.
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