(Repeats item first published on Friday, no changes to text)
1/ FED-FLATION RUMBLINGS
Markets will listen closely to what the Federal Reserve will
have to say on inflation at the end of their two day meeting on
Wednesday, amid concerns that trillions in fiscal stimulus will
fuel a rise in consumer prices.
After years of very low inflation, a range of metrics,
including the Fed's preferred core personal consumption
expenditures (PCE) price index, are on the rise. The PCE rose
3.8% in the 12-months to May, its largest jump in three decades.
The Fed insists consumer price gains will be temporary and
that it has the tools to combat an inflationary surge. Signs
that policy makers may be digging in for a more sustained rise
in consumer prices could spark fears of a sooner-than-expected
unwind of easy money policies, and hurt stocks.
-ANALYSIS-Job-inflation tradeoff, exiled from Fed policy, could
mean a hot summer
2/ DEBT DEBUT
The EU will issue its first bond under the 800 billion euro
post-pandemic recovery fund, possibly within days.
Joint bond issuance may not do for Europe what Treasury
Secretary Alexander Hamilton did in 1790 for the newly formed
United States -- create a fiscal union. There are no plans to
make the fund permanent.
Yet, don't underestimate the significance: The EU is set to
become one of the world's biggest issuers with 80 billion euros
worth of bonds for the recovery fund sold this year. And the
arrival of big, liquid bonds won't be lost on investors or the
ECB, which can buy the debt for hefty stimulus.
-As EU preps debut recovery bond, a reality check for "safe
3/ DELEVERAGING, AGAIN
China reports May industrial production and retail sales
data on Wednesday. Both are expected to come in below April
numbers though will provide a fresh glimpse on the economic
outlook for the world's number two economy.
So far, domestic consumption remains subdued. Exports were
over compensating this year, but that's beginning to change as
the rest of the world opens up and spends less on Chinese
Recent data shows Beijing is back on the deleveraging drive
it abandoned last year when the pandemic hit - meaning subtle
measures to rein in a rising yuan, limited and targeted fiscal
spending, heavy scrutiny on property and local government
sectors and measures to cool runaway commodity prices.
-China's highest producer inflation in over 12 years highlights
global price pressures
4/ GET TOGETHER
Top level meetings over the days to come will keep
geopolitical issues on the boil, and Turkish and Russian markets
On Monday, the NATO summit will kick off in Brussels,
including a first face-to-face meeting between U.S. President
Joe Biden and his Turkish counterpart Tayyip Erdogan. On the
agenda are Syria, Afghanistan and "significant differences"
according to a senior U.S. official, with Ankara and Washington
at odds over a host of issues.
On Wednesday, Biden will face Russian President Vladimir
Putin in Geneva for what promises to be heated talks with bitter
disputes over election interference, cyber attacks, human rights
-Biden, Putin set to meet in 18th-century Swiss villa for summit
5/ FLIGHTLESS GROWTH
Is the newly-hawkish Reserve Bank of New Zealand about to
get its first-quarter growth forecast beaten? Kiwi GDP lands on
Thursday, and the central bank thinks it's going to be negative,
putting the country back in technical recession.
Partial indicators, however, say it may not be so. While the
absence of foreign tourists will be keenly felt, domestic
consumption has been robust and commodity prices - especially
milk and lumber - have shifted favorably.
A beat may not mean sustainable strength, but a headline
surprise would suggest an economy on firmer footing than the
RBNZ appreciates, adding pressure to normalize policy even
faster than the aggressive schedule flagged last month.
-New Zealand manufacturing sales rise in first quarter
(Reporting by Tom Westbrook and Vidya Ranganathan in Singapore,
Dhara Ranasinghe and Karin Strohecker in London, Saqib Ahmed in
New York, compiled by Karin Strohecker; Editing by Toby Chopra)