(Reports by Sigma Squawk)

European Closing Report

Following on from the US import tariff announcement, Canada unveiled a series of countermeasures worth up to C$16.6 Bln and to come into effect July 1st. Canadian Foreign Minister Freeland said they will remain in place as long as the US tariffs do. 

US yields also nudged lower as risk sentiment took a knock while the Dollar Index is hovering around the flat line. The Canadian Dollar was the worst hit meanwhile with USD/CAD reaching 1.30. Elsewhere, the Euro was largely unresponsive to news that the 5-Star and League have reached a deal to form a government with Conte as PM. 

President Mattarella offered the mandate to Conte who has accepted while Giovanni Tria is said to have been named as Finance Minister. At the Fed, Cleveland Fed President Mester said they need to be moving rates up gradually but whether it is three-or-four is less important. 

Governor Brainard said she supports gradual rate increases while also noting that rates could go modestly beyond neutral. US crude futures settled at $67.04 (-$1.17)

* Swiss GDP Data (Q1):
– GDP Q/Q +0.6% versus +0.5% expected, previous +0.6%
– GDP Y/Y +2.2% versus +2.3% expected, previous +1.9%

* UK Nationwide House Price Data (May):
– House Price Index M/M -0.2% versus +0.2% expected, previous +0.2% revised to +0.1%
– House Price Index Y/Y +2.4% versus +3.0% expected, previous +3.0% revised to +2.6%

* US Commerce Secretary Ross said they will announce steel and aluminium tariffs on the EU before the market open or after the close today. He added that the US does not want a trade war.

* French CPI Data (May P):
– CPI M/M +0.4% versus +0.2% expected , previous +0.2%
– CPI Y/Y +2.0%, previous +1.6%
– CPI EU Harmonized M/M +0.4%, previous +0.2%
– CPI EU Harmonized Y/Y +2.3% versus +2.0% expected , previous +1.8%

* Spanish GDP Data (Q1):
– GDP Q/Q +0.7% versus +0.7% expected, previous +0.7%
– GDP Y/Y +3.0% versus +2.9% expected, previous +2.9%

* Swiss Retail Sales Y/Y (Apr) +2.2%, previous -1.8% revised to -1.1%

* Italian Unemployment Rate (Apr) 11.2% versus 10.9% expected, previous 11.0% revised to 11.1%

* SNB’s Zurbrugg said the current monetary policy stance takes into account the fragility of the currency markets.

* UK Consumer Credit (Apr) £1.8 Bln versus £1.3 Bln, previous £0.3 Bln revised to £0.4 Bln
– Net Lending Secured On Dwellings £3.9 Bln versus £3.8 Bln expected, previous £4.0 Bln
– Mortgage Approvals 62.46K versus 63.00K expected, previous 62.91K revised to 62.80K

* Euro Zone CPI Data (May P):
– CPI Y/Y +1.9% versus +1.6% expected, previous +1.2%
– Core CPI Y/Y +1.1% versus +1.0% expected, previous +0.7%

* Euro Zone Unemployment Rate (Apr) 8.5% versus 8.4% expected, previous 8.5% revised to 8.6%

* Italian CPI Data (May P):
– CPI M/M +0.4% versus +0.2% expected , previous +0.1%
– CPI Y/Y +1.1% versus +0.8% expected , previous +0.5%
– CPI EU Harmonized M/M +0.4% versus +0.3% expected , previous +0.5%
– CPI EU Harmonized Y/Y +1.1% versus +1.0% expected , previous +0.6%

* Jonathan Haskel has been nominated to the Bank of England’s MPC