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DEATH, TAXES, THE DEVIL AND THE DETAILS (0648 GMT)
The jury is still out as to how the G7 deal to tax a minimum
out of global behemoths such as Amazon and Google will impact
EPS metrics and balance sheets but it seems that in the meantime
investors are not running to the hills.
The consensus view seems to be that while one big component
of the two certainties in life - death and taxes - is soon to
hit big U.S. tech firms, the devil and tax lawyers are expecting
to have fun playing with the details.
Futures for European bourses and Wall Street are just
slightly in the red, much in sync with the session in Asia
which saw stock benchmarks perform a very orderly retreat.
There's a lot of uncertainty out there on the implementation
of a minimum global corporate tax rate of at least 15%, notably
how keen the rest of the world outside the richest nations are
willing to play ball.
Meanwhile, the name of the game remains inflation and
whether the post-COVID 19 economic rebound will force the U.S.
Federal Reserve to taper if U.S. President Joe Biden pulls off
his proposed $1.7 trillion infrastructure plan.
Yields on U.S. 10-year notes below 1.6% tend to suggest
little stress on that front.
The May U.S. job data showed there was a long way to go to
reach the Fed's full employment goal even if the door to talking
about tapering might be open at the June policy meeting.
Not many are however holding their breath for the European
Central Bank's policy meeting this Thursday with a status quo
pretty much a given.
Still, this morning showed strong activity with China's
imports growing at their fastest pace in 10 years in May,
fuelled by surging commodity prices.
Bitcoin is still well below the $40,000 bar gaining little
from El Salvador President Nayib Bukele saying he would send a
bill to Congress to make the cryptocurrency legal tender.
Key developments that should provide more direction to
markets on Monday:
-- United Kingdom Halifax House Prices for May
-- Euro Zone Sentix Index for June
-- Auctions: US 6mth and 3 mth -bills
(Julien Ponthus)
CAUTIOUS EUROPEAN STOCKS (0534 GMT)
European bourses seem set to open slightly in the red this
morning and definitely on the side of caution.
Futures for the STOXX 50 and Germany's DAX are losing about
0.1% to 0.2% while London's FTSE 100 is flat.
It is not clear yet how the G7 tax deal on multinational
companies will pan out and in the meantime, investors are still
waiting for more visibility on the U.S. infrastructure bill.
Inflation moving forward also remains a big unknown and what
to make of the May U.S. jobs data.
There's probably less anxiety on Thursday's ECB policy
meeting which is widely expected to maintain its stimulus
measures with tapering a distant prospect.
(Julien Ponthus)
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