Five things you need to know to start your day

Biden’s tax plans are PMI day and quarantine-free travel.


The United States has proposed a minimum global corporate tax rate of 15%, with negotiators seeking to international agreement in place in the middle of this year. The proposed rate is lower than the 21% level targeted by the Biden administration for foreign income of U.S. companies. There are other tax measures underway in the United States, with proposals strengthen compliance, including the duty to report Cryptocurrency transfers over $ 10,000 to the IRS.

PMI day

There was good economic news in this morning’s survey data for the Eurozone and the UK A rebound in services helped push the May Composite Purchasing Managers Index up for the euro zone at 56.9, factories supply shortages hampering production levels. In the United Kingdom, PMIs reached the highest level since the survey began in 1998 and retail sales have jumped. US PMI data is released at 9:45 a.m. Eastern Time.

Vaccine, travel

The European Union has moved forward with a plan to EU-wide vaccination certificates, after the announcement of the reopening of the block for travel without quarantine of countries deemed safe. Overall more than 1.57 billion vaccines have now been administered, with a total of 279 million in the United States. As India sees the number of new cases drop, the country suffers from some of the worst side effects of the virus, with a fungal infection reaching epidemic proportions.

The markets are going up

Better-than-expected economic data is helping stocks end a volatile week on a positive note. Overnight, the MSCI Asia Pacific index rose 0.4% while Japan’s Topix index closed up 0.4%. In Europe, the Stoxx 600 index had gained 0.5% by 5:50 am, with all but two industrial sectors in the green. S&P 500 futures highlighted slight increase at the opening, the yield on the 10-year Treasury stood at 1.628%, rose and gold oil was higher.

To come up …

Data for April existing home sales in the United States is at 10:00 a.m. and Baker Hughes’ latest rig count is at 1:00 p.m. Four regional Fed chairmen speak later. President Joe Biden meets Moon Jae-in of South Korea. Deere & Co., VF Corp. and Foot Locker Inc. are among the companies reporting results. Tim Cook, CEO of Apple Inc. speak out today in the case of Epic Games Inc. vs. the App Store.

What we read

Here’s what caught our attention over the past 24 hours.

And finally, here is what interests Emily this morning

For a while, short selling core European government bonds was a widower’s new profession. No more.

Europe is taking the lead in the big government bond sale that swept the world earlier this year. While yields in the United States have stabilized after rising rapidly in the first quarter, those on German Bunds continue to climb. The appetite for German debt has particularly bitter, judging by recent auctions. Germany’s sale of 10-year bonds this week met with the coolest reception in over a year.

Rising expectations for a pullback from this support, and soon, are at least in part to blame for the rout. It is increasingly difficult for the European Central Bank to justify the political parameters of the pandemic era as vaccine deployment accelerates, as well as the economics. So far it is stuck to the scenario of global central bankers that the recent surge in price pressures is temporary. But judging by the more belligerent comments from German central bank chief Jens Weidmann, it may be more difficult to ignore consumer prices exceeding the target in the country as it nears its centenary of hyperinflation.

This handing over of the recovery / reflation stick to Europe has resulted in a sort of rotation among investors in the major sovereign markets of the world. Kellie Wood, fixed income portfolio manager at Schroder Investment Management, is among those who have moved their underweight positions across the pond, from the US to the UK and Europe. “The ECB is going to be at a point where yields rise alongside very healthy growth and inflation results, which we haven’t seen in Europe for decades and decades,” she said.

Follow Bloomberg’s Emily Barrett on @notthatECB

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