Asia
With China celebrating Labour day, and New Zealand’s overnight employment data nothing to write home about, there’s been little to dispel the mood resulting from Tuesday morning’s less-than-stellar Chinese PMIs. However, Reuters does inform us that authorities are planning to relax private share placement limitations in order to improve access to funding. Still, those Chinese indexes showing signs of life are flat, with the Hang Seng down 0.65% and the Nikkei down 0.22%.
Europe
The pound yesterday added a full 100 pips, but since both Brexit and the numbers don’t seem to support this, it should be relegated to corresponding weakness in the US dollar. With markets ending generally up (the FTSE closed down 0.3%, but otherwise most benchmarks added anything between 0.1 and 1.6%) data from Europe was relatively positive yesterday. Price indexes tended towards flat to disappointing, with Spain’s GDP up a dot, Italy’s as well, and the zone a tenth up to 1.2% YoY. Germany’s CPI rose to 2% YoY, and the EU’s unemployment also managed to shed a tenth in March, landing on 7.7%. Especially pleasing to note was Italy’s unemployment, which fell to 10.2%, despite expectations of an increase to 10.7%. This morning, UK housing prices were up 0.2% both YoY and MoM, and the British Retail Consortium announced a drop in shop price inflation for the 1st time in 6 months.
US
With a China deal now almost “in the bag”, trade negotiations with the EU are on the horizon on a less-than-amicable note – the US threatening 25% tariffs on cars to counter Europe’s 10%, and the EU threatening to up tariffs in retaliation. And then there’s the Boeing-Airbus spat, recently brought to a blistering head by the latter’s capitalization on the former’s 737MAX mess. US housing was a mixed bag last night, the Case Shiller index down a ½% to 3, while pending home sales rose from minus 1% in February to plus 3.8 in March (MoM). The Chicago PMI lost a full 6 points and is reading 52.6 for April – all this ahead of tomorrow’s FOMC policy statement as the dollar flatlines after a 5-day decay, perhaps as expectations grow for an interest rate cut by the end of the year. These were highlighted yesterday by Trump’s call for a 1% rate cut and increased bond-buying activities – a call that Reuters believes the FED will ignore.
Commodities
Oil took another hit yesterday after the API reported another 6.8mB build-up, taking another $1.50 hit and settling on the 63.30 support line. Prices are being buoyed, thankfully, by reports from Russia’s RIA news agency that Energy Minister Khalid al-Falih intends to stick to the OPEC+ production deal and perhaps extend it beyond the end of this year.
Bitcoin has formed a perfect double bottom over the past 3 days, and it is currently sitting above 5300. Yesterday, Nasdaq (the company) added another crypto index, this one – covering XRP – joins current indexed data for Bitcoin trading and Ether, plus 2 benchmarks tracking the top 200 cryptocurrencies (as determined by market cap), based on data provided by ConMarketCap.
Shares
Despite the broken promise of a 5G phone by 2020, Apple earnings yesterday beat expectations sending shares up 4.15%, primarily on a buyback announcement. Revenues, however, are less than pleasant, iPhone sales down 17%. GE performed similarly putting shares at a 30-day high after beating earnings expectations but missing revenue by $20mn. General Motors didn’t do as well – earnings 2 cents under the expected but revenues beating the consensus by a $½ bn. Shares are down 2.55%. And Pfizer shares are up a percent after beating expectations on both EPS ($0.85) and revenue ($13.21bn).
Today’s report from GlaxoSmithKline is expected to show a 7 cent drop in earnings on an $870mn drop in revenues QoQ.
Events
08:30 AM GMT – UK | Markit Manufacturing PMI, Consumer Credit (Apr), and Mortgage Approvals (Mar) |
11:00 AM- 16:00 PM GMT – US | Mortgage Applications and Employment Change (Apr), Markit Manufacturing PMI (Apr) (13:45), Manufacturing PMI, Construction Spending & ISM Prices Paid (14:00). And at 18:00: Fed’s Monetary Policy Statement and Fed Interest Rate Decision. |
13:30 PM GMT – Canada | Markit Manufacturing PMI (Apr), and BoC’s Governor Poloz speech at 20:15 |
14:30 PM GMT – OIL | EIA Crude Oil Stocks Change (Apr 26) |
22:45 PM GMT – NZ | Building Permits s.a. (MoM) (May) |
For more, visit our Economic Calendar