German business confidence falls in June

The German IFO business climate index fell unexpectedly in June, declining to a value of 88.6 from 89.3 in May. Consensus expectations had been for a rise in the headline measure to 89.6. Underlying the move was a deterioration in the expectations component of the survey, which fell 1.3 points to a value of 89.0, consistent with the fall seen in the S&P PMI seen at the end of last week. The current conditions component, in contrast, remained unchanged between May and June.

The Canadian government has announced a 30-day public consultation regarding imports of Chinese electric vehicles. The announcement is a precursor to the government imposing tariffs on Chinese made electric vehicles, and if implemented would mean Canada join the US and the Eurozone in clamping down on these imports.

Plans have been approved to develop an AED 30bn drainage system for Dubai. The works should amount to an eightfold increase the Emirate’s rainwater drainage capacity once completed in 2033.

Consumer price inflation in Oman rose sharply in May, although nonetheless remains at fairly benign levels. CPI rose 0.94% y/y, up from 0.4% y/y in April.

Today’s Economic Data and Events

• 18:00 US conference Board consumer confidence (Jun). Forecast: 100

Fixed Income

• Moves in US treasury yields were relatively muted on Monday, ahead of the release of PCE data and the first presidential debate later in the week. The 2yr yield ended the day largely unchanged at 4.7234%, while the 10y yield fell -2bp to end the day at 4.2321%.
• European bond yields were generally marginally weaker on Monday, except for the 10yr German Bund which rose 1bps to 2.417%
• Energy Development Oman has mandated banks for a USD benchmark 7yr sukuk according to press reports. EDO is the largest oil and gas producer in Oman and wholly owned by the government.

FX

• The US dollar spot index dropped 0.31% on Monday, its biggest daily decline since mid-May. EURUSD gained 0.37% to reach 1.0733 and GBPUSD rose 0.32% to 1.2686. The Yen strengthened marginally against the Dollar, with USDJPY falling 0.11% to 159.62.
• Commodity currencies were also generally stronger against the dollar on Monday. AUDUSD rose 0.24% to 0.6657, NZDUSD gained 0.1% to 0.6125 and USDCAD fell 0.26% to 1.3657.

Equities

• US equity market moves were mixed on Monday, with technology stocks – including Nvidia – ending the day weaker. The Dow Jones gained 0.67%, while the S&P 500 and the NASDAQ fell 0.31% and 1.09%, respectively.
• Regionally, the DFMGI fell 0.3% and ADXGI gained 0.28% on Monday.

Commodities

• Oil futures rose on Monday, with continued attacks on commercial ships in the Red Sea. Brent oil rose 0.9% to USD 86.01/b, while WTI rose 1.11% to USD 81.63/b.