Focus on central bank speeches with ECB’s Coeure and Fed’s Fisher but mostimportant will be Fed chair Yellen’s testimony.
Bank of Canada will announce its rate decision. It is widely expected that BoC willkeep its key policy rate at 1.0% but it will be interesting to hear its comments on thefairly sharp rise in inflation. Most of the rise in Canadian inflation reflects supply sidefactors. There might also be focus on comments regarding the recent strengthening ofthe Canadian dollar.
Germany is printing EUR4bn in Bunds (May-24) – at a new all-time-low yield ofaround 1.20%. The previous low was 1.28% on 17 April 2014. Euro area core yieldshave been pushed down by a combination of 1) very low inflation, 2) the design of theTLTRO and implied forward guidance that signals ‘low for very long’, 3) recentweakening in European data as reflected in the surprise index that has dropped toaround 1Y low and 4) limited headwind from US rates where the pricing of the Fedstill remains relatively soft.
Most interesting macroeconomic numbers will be US industrial production for June,MBA Mortgage Applications and the NAHB Housing Market Index.
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