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SocGen's Overnight Economic News Summary

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Societe Generale in its early Monday economic news summary pointed out:

Brent +2.5% to US$93.5/barrel, 10-year United States Treasury yield +3bps at 4.47%, Germany's Bund +3bps at 2.97%. U.S.-Iran exchanged messages seeking changes to the draft agreement, including a ceasefire extension and reopening the Strait of Hormuz. European Central Bank three-year inflation expectations dip to 2.9% in April from 3.0% in March.

China's official manufacturing PMI drops to 50.0 in May from 50.3 in April; non-manufacturing in the expansion zone at 50.1 versus 49.4 previously.

South Korea's trade surplus widens to US$26.9 billion in May from US$23.8 billion in April, exports surge 53.2% year over year (chips driven). Kospi hits record 8,476 despite persistent FPI outflows, won (KRW) weakens to 1,517/USD, strengthening the case for July Bank of Korea rate hike.

CFTC positioning: Euro (EUR) net longs trimmed to 3.6% of OI, yen (JPY) shorts raised to 26.8%, sterling (GBP) shorts cut to 21.8%, Australian dollar (AUD) longs reduced to 19.9%, Canadian dollar (CAD or loonie) longs jumped to 23.1%, Mexican peso (MXN) longs declined to 28.9%, Nymex longs trimmed to 8.0%, lowest since Feb. 17.

Week ahead: U.S. NFP, ISM. Eurozone flash consumer price index, Q1 gross domestic product second read, retail sales. Poland's and India's central banks are forecast to stay on hold. CPI for Switzerland, Sweden, South Korea, Turkey, and the Czech Republic.

Nikkei +1.1%, EUR 10-year IRS +3.5bps at 3.01%, Brent crude +2.5% at US$93.5/barrel, Gold -0.6% at US$4,512/oz.

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Market Chatter: Trump Administration Wants To Raise North American Auto Content to 82%, With Half From U.S.

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RBC On Key Things To Watch Next Week and Its Rates View

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