UNITED STATES

US stocks closed in the green on Monday on the back of strong gains in tech stocks such as Facebook and Netflix. Tech-heavy NASDAQ had the highest gains with 0.62% while the DOW and the S&P both rose 0.09%. The Federal Reserve will be the focus this week as markets have already priced in at least two rate cuts as fears of a fallout from global trade tensions continue. Yield on 10Y USTs was up 1bp to 2.0942%.

UNITED KINGDOM

International Development Secretary Rory Stewart is turning into a formidable force for the to fight it out against Boris Johnson in the race for the Tory premiership. With Boris Johnson seemingly guaranteed to make it to the top two, other frontrunners are increasingly becoming wary of Stewart. Despite only scrapping into the second round of voting with just 19 votes, he has lately won over support because of his honest nature with David Liddington – May’s de facto deputy – having thrown his support. The second round of voting will be this afternoon with results being announced at 6pm. The pound fell to 1.2532 against the dollar while yield on 10Y UKTs was about flat at 0.8484%.

EUROPEAN UNION

Eurozone wage growth accelerated the fastest in a decade in Q1 recording a 2.5% rise underlining the bloc’s economic expansion even as the manufacturing sector stutters amid weakening global trade. The figure was well above the rate of inflation and the rate of wage growth for the last three years which averaged 1.8%. All eurozone countries bar Italy recorded growth of over 2% with Eastern European countries even having double digit growth levels. The euro was about flat against the dollar at 1.1218 while yield on 10Y DBRs was up 1bp to -0.2452%

ASIA

Asian markets mostly gained in afternoon trading as investors awaited key central bank meetings this week. The HANG SENG and CSI were trading higher at 1.20% and 0.09% respectively while the NILLEI shed 0.72%. Eyes will be on the US Federal Open Market Committee meeting starting today before a policy statement is released tomorrow; expectations are that a rate cut will not be effected this meeting.

TURKEY

The year-end estimate for the dollar-lira rate fell to 6.3015 in the central bank’s June survey of expectations from 6.4310 the previous month. With the economy seemingly on a rebound, there were improvements on inflation estimates as well with the year-end estimate down to 15.85% from a previous 16.68% and inflation in 12 months at 14.88% from 15.48% previously. The unemployment rate also fell to 14.1% in March from 14.7% in February in what should be positive signs for policymakers. The lira closed higher to the dollar at 5.8732 while TURKEY 47s traded lower on Monday, closing at 78.255.

LATAM

Forecasts for Brazil growth fell sub 1% for the first time as economists continued slashing growth prospects for the beleaguered South American nation. GDP growth is estimated to grow 0.93% this year down from 1% that was forecast last week according to the central bank’s weekly survey. Expectations are that the benchmark interest rate will be cut to 5.75% by year end as the Bolsonaro administration tries to spark life into the economy. High unemployment has continued to undercut consumer demand while uncertainty over pension reform has continued to hamper investment. A Bloomberg survey is pointing towards the rate being held steady in this week’s central bank board meeting. The real closed about flat at 3.8889 to the dollar as BRAZIL 47s traded lower at 103.556.

RUSSIA

Russia shifted firmly to monetary easing when it cut the rate for the first time in over a year and at the same time signaled this could be followed by tow more in the year. With the 25bps cut to 7.5%, Russia becomes the latest emerging market to shift towards a more dovish policy as increasing trade tensions weigh on growth. The central bank also pointed out that annual inflation had fallen for a third month, reaching 5% as of June 10 with forecasts of 4.2% – 4.7% by year end. The bank also noted that the Finance Ministry’s plans to use funds accumulated in the wealth fund could scupper inflation targets by putting upward pressures on inflation. The ruble was about flat to the dollar at 64.3150 while RUSSIA 47s traded higher to close at 108.238.

SSA

A UN report suggests that Sub Saharan Africa’s population is set for a rapid increase and will account for an estimated 50% of global population growth between now and 2050. The economy’s largest nation Nigeria; is set for her population to double and reach 400m while the world reaches the 9.7bn mark. In the currency sphere, the South African Rand is trading at 0.06763 against the US Dollar, while the yield on RSA 9-YR is 4.913%.