China now 'moderately prosperous' 🥂🎉🙌

Getting an invitation to the July 1 festivities is often considered a show of favor for corporate elites, and provides some relief for Evergrande investors as the company faces heightened scrutiny to pare its massive debt load. Hui, China’s 22nd-richest man, has been a member of the Communist Party for more than 35 years, and a regular donor to charitable causes.

Hui’s attendance at the ceremony “broke market’s skepticism that regulators are targeting Evergrande,” said Daniel Fan, a credit analyst with Bloomberg Intelligence. His appearance “soothed the worries,” while Evergrande’s progress in cutting debt further boosted confidence. That may ease concerns about whether the company is too big to fail, Fan said.

The Caixin China General Manufacturing PMI fell to 51.3 in June 2021 from 52 in May, below market estimates of 51.8. This was the lowest reading in three months, amid the recent uptick in local COVID-19 cases and supply chain difficulties.

Output rose the least since March 2020, new order growth eased to a three-month low, and export sales were broadly stagnated.

Meantime, the rate of job creation was the second-strongest since January 2013; while backlogs of work rose for the fourth month in a row.

On the price front, inflationary pressures eased, with input prices rising the least in seven months while selling prices increasing at the slowest pace since February. Finally, the degree of optimism was unchanged from May's four-month low.

"In the second half of this year, the low base effect from last year will weaken. Inflationary pressure is still a serious challenge for China,” said Wang Zhe, senior economist at Caixin Insight Group.

Citi: expect oil market to remain in deep deficit of over 3 million barrels per day through Q3, 2021, even after accounting for higher OPEC+ production. Should OPEC+ remain conservative in adding oil back to market, prices look likely to rise above $80/bbl soon

Today’s OPEC+ meeting: expectations are that the group will agree on a supply increase in the region of 500Mbbls/d.

However, Kazakhstan has reportedly said that the group is considering whether to increase output in August or September.

If the latter, that will likely be enough to push the market higher.

While attention is clearly focused on what OPEC+ may do in the short term, according to Reuters, the OPEC+ Joint Technical Committee has said that there is a risk that the global market slips back into surplus when the OPEC+ deal ends in April 2022.

Yesterday’s EIA report was once again constructive, showing that US crude oil inventories fell by 6.72MMbbls. That marks the sixth consecutive week of declines and takes total crude oil inventories to a little more than 452MMbbls, the lowest level since March last year.

In addition, crude oil inventories at Cushing continue to edge lower, falling by 1.46MMbbls.

Analysts have said that given the demand-side risk posed by the resurgent spread of the Delta coronavirus variant, and with additional Iranian barrels potentially entering the market following a possible deal on the Joint Comprehensive Plan of Action, the coalition is likely to agree on a tempered increase of 500,000 b/d of oil production in August.

"Saudi Arabia remains cautious on demand and Iran nuclear talks, while Russia is more focused on regaining market share as demand rebounds," Platts Analytics said in a recent note. "However, with Brent already in the mid-$70s, both will likely be committed to not overheating the market."

Mele Kyari, the head of state-owned Nigerian National Petroleum Corp. and the country's representative at OPEC, has backed an easing of output cuts, as he said that oil prices were "very high" and starting to constrain both producers and consumers, S&P Global Platts reported earlier.

"The only way to pull down prices is to increase ... supply. So that is what is going to happen. OPEC is going to intervene to see how we can bring down prices,"

Turkey's central bank said on Thursday it hiked the required reserve ratios on foreign currency deposits by two percentage points and took steps to increase the share of Turkish lira deposits in the banking system.

(Newsquawk) Looking ahead, highlights include Riksbank Policy Announcement (no change expected), Final EZ, UK & US Manufacturing PMIs, OPEC+ Meeting, US IJC, ISM Manufacturing, ECB's Lagarde, Elderson, BoE's Bailey, Fed's Bostic