Biden and top Congress leaders talks on debt limit expected tomorrow ahead of G7 summitcurrenc – FXStreet

Credit: Original article can be found here


EU mid-market update: Biden and top Congress leaders talks on debt limit expected tomorrow ahead of G7 summit; Turkish presidential elections to see 2nd round.


– Quiet session on the macro front as spring earnings season fades. Over the weekend, Turkish election results undecided as no clear majority between Erdogan and his opposition. Heads for a run-off estimated to take place on May 28th.

– For the US, debt ceiling talks seemingly optimistic according to Pres Biden with new meeting scheduled for Tues, May 16th but agreement unlikely to be concluded before G7 Japan summit (May 19-21st).

– European military aid for Ukraine continued over the weekend as Germany follows UK’s long range missile shipment with a $3.2B package of Leopard tanks, ahead of highly circulated ‘spring offensive.’

– Asia closed higher with Hang Seng outperforming at +1.8%. EU indices are +0.2-0.4%. US futures are +0.3%. Gold +0.3%, DXY -0.1%; Commodity: Brent +0.2%, WTI +0.2%, TTF +2.1%; Crypto: BTC +2.2%, ETH +1.6%.


– BOJ Gov Ueda commented at G7 that global central banks appeared to share view that impact of past rate hikes had yet to fully appear on the economy and inflation.

– China PBoC conducted its 1-year Medium-Term Lending Facility (MLF with CNY125B injected compared to CNY100B maturing. Rate steady at 2.75%.


– ECB’s De Guindos (Spain) stated that it was in the final stages of its historic cycle of rate hikes.

– ECB’s Kazimir (Slovakia) stated that might stay with interest rate hikes longer than originally thought.

– Turkey elections going to runoff May 28th with President Erdogan leading but unable to achieve the 50% threshold for an outright win.


– Pres Biden believed that a debt meeting would be held on Tues [May 16th], remained optimistic about debt ceiling talks. Still planned to go to G7 summit in Japan on Wed, May 17th.

– Treasury Sec Yellen stated that Republicans and Democrats were making progress in debt-limit talks.

– Fed’s Bullard (Non-Voter) noted that market based inflation expectations were back down to levels consistent with the Fed’s 2% inflation target; Policy was now at the low end of sufficiently restrictive. Prospects for continued disinflation were good but not guaranteed.

– US bank deposits rose by $67.3B unadjusted (1st increase in 4 weeks).


– Iraq Oil Min Abdel-Ghani stated that he did not expect OPEC+ to make further cuts to oil output at its next meeting in June.

Speakers/fixed income/FX/commodities/erratum


Indices [Stoxx600 +0.21% at 466.46, FTSE +0.23% at 7,772.30, DAX +0.07% at 15,925.15, CAC-40 +0.35% at 7,440.85, IBEX-35 -0.33% at 9,203.67, FTSE MIB -0.06% at 27,331.00, SMI +0.29% at 11,597.70, S&P 500 Futures +0.32%].

Market focal points/key themes: European indices open higher across the board with Spanish IBEX 35 notable exception; Spanish bank BBVA led losses following 1st round results of Turkey presidential elections as it holds large exposure to Turkish markets; John Wood Group shares down sharply in London as Apollo does not intend to make new offer; shares of Ceconomy also trade down over 5% following earnings results; earnings expected in the upcoming US session include and Workhorse Group.


Consumer discretionary: Ceconomy [CEC.DE] -8.0% (earnings), Currys [CURY.UK] +6.0% (trading update).

Energy: Siemens Energy [ENR.DE] +2.5% (earnings; updates outlook; reportedly the G7 and EU discuss to ban restart of Russian gas pipelines).

Financials: AXA [CS.FR] +2.5% (earnings), BBVA [BBVA.ES] -3.0% (exposure to Turkey following 1st round presidential elections results).

Industrials: John Wood Group [WG.UK] -35% (Apollo does not intend to make new offer), Rheinmetall [RHM.DE] +2.0% (order).


EU Commission Spring Economic Forecasts raises the 2023 and 2024 GDP and inflation outlook for the region. It noted that downside risks to economic outlook had increased, but leading indicators suggested continued growth in Q2. It raised the EU-19 2023 GDP from 0.9% to 1.1% and also raised the 2024 GDP growth from 1.5% to 1.6%. It raised the EU-19 2023 inflation from 5.6% to 5.8% and 2024 inflation from 2.5% to 2.8% (**Note: above ECB 2% target).

EU Economic Commissioner Gentiloni (Italy) noted that wage growth to fall short of inflation in 2023.

Turkey’s Supreme Election Board official results with 99% votes counted: Erdogan with 49.40% of votes, Kilicdaroglu with 44.96% of votes; Ogan 5.20%; 2nd round of presidential elections on May 28th.

– China Special envoy of Eurasian affairs to visit Ukraine on May 16-17th.

Currencies/fixed income

– USD appeared to benefit from safe-haven flows from concerns over global growth. Dealers noted that recent US 5-10 year inflation expectations released on Friday registered its highest level since 2011 giving the greenback some legs. The data kept the Jun FOMC rate hike scenario in play.

– The Far East session on Tuesday will see the release of key Chinese monthly indicators which could prompt some renewed worries about a global recession. China has experienced a spat of disappointing economic release recently.

– The 1st round of Turkey election results put the incumbent Erdogan ahead and helped to put renewed pressure on the TRY currency. The 2nd round is set for May 28th.

Economic data

– (FI) Finland Apr CPI M/M: 0.3%e v 0.6% prior; Y/Y: 7.9% v 7.9% prior.

– (FI) Finland Mar Final Retail Sales Volume Y/Y: -4.4% v -5.8% prelim.

– (JP) Japan Apr Preliminary Machine Tool Orders Y/Y: -14.4% v -15.2% prior.

– (DE) Germany Apr Wholesale Price Index M/M: -0.4% v +0.2% prior; Y/Y: -0.5%e v +2.0% prior.

– (SE) Sweden Apr CPI M/M: 0.5% v 0.6%e; Y/Y: 10.5% v 10.6%e; CPI Level: 399.93 v 401.11e.

– (SE) Sweden Apr CPIF M/M: 0.2% v 0.5%e; Y/Y: 7.6% v 8.0%e.

– (SE) Sweden Apr CPIF (ex-energy) M/M: 0.4% v 0.8%e; Y/Y: 8.4% v 8.7%e.

– (NO) Norway Apr Trade Balance (NOK): 76.1B v 70.4B prior.

– (DK) Denmark Apr PPI M/M: +0.2% v -0.5% prior; Y/Y: 1.5% v 3.8% prior.

– (DK) Denmark Q1 GDP Indicator Q/Q: 0.3%e v 1.1% prior.

– (IN) India Apr Wholesale Prices Y/Y: -0.9% v -0.4%e.

– (CH) Swiss Apr Producer & Import Prices M/M: 0.2% v 0.2% prior; Y/Y: 1.0% v 2.1% prior.

– (CH) Swiss weekly Total Sight Deposits (CHF): 520.1B v 525.6B prior; Domestic Sight Deposits: 507.1B v 505.7B prior.

– (PL) Poland Apr Final CPI M/M: 0.7% v 0.7% prelim; Y/Y: 14.7% v 14.7% prelim.

– (TR) Turkey Apr Central Govt Budget Balance (TRY): -132.5B v -47.2B prior.

– (IT) Italy Mar General Government Debt: €2.790 v €2.772T prior (record high).

(EU) Euro Zone Mar Industrial Production M/M: -4.1% v -1.4%e; Y/Y: -1.4% v 1.8%e.

– (IS) Iceland Apr International Reserves (ISK): 812B v 810B prior.

Fixed income issuance

– (EU) ESM opened its book to sell EUR-denominated Aug 2033 bond; guidance seen +9bps to mid-swaps.

– (DK) Denmark sold DKK3.76B in 3-month Bills; Avg Yield: 2.970% v 2.760% prior; Bid-to-cover: 1.26x v 1.00x prior.

– (SK) Slovakia Debt Agency (Ardal) sold 2027, 2032, 2035 and 2036 bonds.

Looking ahead

– (NG) Nigeria Apr CPI Y/Y: 22.1%e v 22.0% prior.

– 05:25 (EU) Daily ECB Liquidity Stats.

– 05:30 (DE) Germany to sell €5.0B in 12-month BuBills.

– 05:30 (NL) Netherlands Debt Agency (DSTA) to sell €3.0-4.0B indicated range in 3-month and 6-month Bills.

– 05:30 (ZA) South Africa announces details of upcoming I/L bond sale (held on Fridays).

– 06:00 (IE) Ireland Mar Trade Balance: No est v €5.3B prior.

– 06:00 (IL) Israel Apr Trade Balance: No est v -$2.4B prior.

– 06:00 (IL) Israel to sell combined ILS1.35B in 2025, 2029, 2030, 2031 and 2032 bonds.

– 06:45 (US) Daily Libor Fixing.

– 07:00 (SE) Sweden Central Bank (Riksbank) Bunge.

– 07:25 (BR) Brazil Central Bank Weekly Economists Survey.

– 07:30 (IN) India Apr Trade Balance: -$19.3Be v -$19.7B prior; Exports Y/Y: No est v -13.9% prior; Imports Y/Y: No est v -7.9% prior.

– 08:00 (PL) Poland Mar Current Account Balance: €2.6Be v €2.6B prior; Trade Balance: €1.4Be v €2.2B prior; Exports: €28.6Be v €26.5B prior; Imports €26.9Be v €24.3B prior.

– 08:00 (UK) Daily Baltic Dry Bulk Index.

– 08:00 (IN) India announces details of upcoming bond sale (held on Fridays).

– 08:00 (ES) Spain Debt Agency (Tesoro) size announcement on upcoming issuance.

– 08:10 (DE) ECB’s Nagel (Germany).

– 08:15 (CA) Canada Apr Annualized Housing Starts: No est v 213.9K prior.

– 08:30 (US) May Empire Manufacturing: -4.0e v +10.8 prior.

– 08:30 (CA) Canada Mar Wholesale Trade Sales M/M: No est v -1.7% prior.

– 08:45 (US) Fed’s Bostic.

– 09:00 (FR) France Debt Agency (AFT) to sell €4.7-6.3B in 3-month, 6-month and 12-month bills (4 tranches).

– 09:00 (RU) Russia May Gold and Forex Reserve w/e May 5th: No est v $598.9B prior.

– 09:00 (CA) Canada Apr Existing Home Sales M/M: No est v 1.4% prior.

– 09:15 (US) Fed’s Kashkari.

– 11:00 (PE) Peru Apr Unemployment Rate: No est v 7.5% prior.

– 11:00 (PE) Peru Mar Economic Activity Index (Monthly GDP) Y/Y: No est v -0.6% prior.

– 11:30 (IL) Israel Apr CPI M/M: 0.4%e v 0.4% prior; Y/Y: 4.6%e v 5.0% prior.

– 11:30 (US) Treasury to sell 13-Week and 26-Week Bills.

– 12:00 (CO) Colombia Q1 GDP Q/Q: 0.9%e v 0.7% prior; Y/Y: 3.6%e v 2.9% prior.

– 12:00 (CO) Colombia Mar Economic Activity Index (Monthly GDP) Y/Y: 1.5%e v 3.0% prior.

– 12:00 (UK) BOE’s Pill (chief economist).

– 16:00 (US) Mar Net Long-term TIC Flows: No est v $71.0B prior; Total Net TIC Flows: No est v $28.0B prior.

– 16:00 (US) Weekly Crop Progress Report.

– 17:00 (KR) South Korea Apr Import Price Index M/M: No est v 0.8% prior; Y/Y: No est v -6.9% prior; Export Price Index M/M: No est v 2.0% prior; Y/Y: No est v -6.4% prior.

– 17:00 (US) Fed’s Cook.

– 19:30 (AU) Australia Weekly ANZ/Roy Morgan Consumer Confidence: No est v +2.1% prior.

– 20:30 (AU) Australia May Westpac Consumer Confidence M/M: No est v 9.4% prior; Index: No est v 85.8 prior.

– 21:30 (AU) Reserve Bank of Australia (RBA) May Minutes.

– 22:00 (CN) China Apr Industrial Production Y/Y: 10.8%e v 3.9% prior; Industrial Production YTD Y/Y: 4.9%e v 3.0% prior.

– 22:00 (CN) China Apr Retail Sales Y/Y: 22.0%e v 10.6% prior; YTD Y/Y: 8.2%e v 5.8% prior.

– 22:00 (CN) China Apr YTD Fixed Urban Assets Y/Y: 5.7%e v 5.1% prior.

– 22:00 (CN) China Apr YTD Property Investment Y/Y: -5.6%e v -5.8% prior; Residential Property Sales Y/Y: No est v 7.1% prior.

– 22:00 (CN) China Apr Surveyed Jobless Rate: 5.3%e v 5.3% prior.

– 23:00 (NZ) New Zealand Apr Non-Resident Bond Holdings: No est v 60.3% prior.

– 23:00 (TH) Thailand Central Bank to sell THB60B in 3-month bills.

– 23:00 (TH Thailand to sell THB25B in Jun 2026 bonds.

– 23:30 (HK) Hong Kong to sell 3-month, 6-month and 12-month bills.