Markets have been mostly choppy/sideways on Tuesday although the Euro is firmer after some positive data from across the EU. The Eurozone Q1 GDP beat market expectations (+ 0.4% qq, vs expectation of 0.3%, and previous Q4 +0.2%), and in particular, both Italy and Spain, beat expectations. At the same time the EU unemployment rate (7.7%) dropped to lowest in more than a decade and in further upbeat news, the German inflation accelerated by 1.0%mm/2.0%yy (exp 0.5%mm/1.6%yy), a fair bit higher than expected, and did nothing to hurt the Euro.
Otherwise, in the FX space, the Yen is mildly firmer, while Cable is back above $1.30, to a two-week high, after reports that the tone of the Brexit talks between the UK government and the Labour party have improved.
Elsewhere, markets have been fairly stable although the S+P and the NASDAQ ended the day with a late rally to finish at new all-time highs. Earlier in the session the indices had retreated little after Google-parent, Alphabet, fell sharply following a revenue miss and Apple dropped ahead of the release of its own results, which eventually showed that iPhone Revenue fell by 17%. WTI had a choppy, volatile session but ended the day fairly flat, albeit that it made gains of 6% in April and is up 41% on the year! The metals have done little.
Looking ahead, Wednesday will begin with the NZ Unemployment data for Q1 (exp 4.2%, Change +0.5%, PR 70.9%) and labour Cost Index. After that, the EU is out for the May Day holiday although the UK Mfg PMI and Consumer Credit are both due. Later on, the US Markit Manufacturing PMI and the ISM Mfg PMI/Prices Paid will be in focus along with the ADP Jobs data and comes ahead of the main focus of the week, being the FOMC Meeting. No change to policy is expected at this month’s meeting and the interest will lie in the statement and in J. Powell’s Press Conference. We wait and see. The EIA Crude Oil Stocks Weekly Change will be released late in the day. Have a good day.
Economic data highlights will include:
Wed: NZ Unemployment, Australian AIG Performance of Mfg Index, EU Labour Day Holiday, UK/US Mfg PMIs, US FOMC Meeting, ADP Jobs data, ISM Mfg PMI/Prices Paid, Construction Spending, Total Vehicle Sales, EIA Crude Oil Stocks Weekly Change
Market moves, in brief:
FX: DXY 97.52 (-0.32%)
Bonds: US10Y; 2.503% (-1.07%), German 10Y; +0.014% (+328%), UK 10Y; x+1.184xx% (+2.42%), Australian 10Y; 1.799% (-0.06%), NZ 10Y; 1.91% (+0.26 %), China 10Y; 3.40% (-0.76%)
Stock Indices: DJI; +0.15%, S+P; +0.10%, NASDAQ; -0.81%, EUStoxx50; +0.36%, FTSE100; -0.30%, Shanghai Composite; +0.52%,
Metals: Gold $1284 oz (+0.31%), Silver $14.97 oz (+0.38%), Copper $2.903 lb (+0.48%), Iron Ore $93.79 per tonne (NYMEX) (+2.51%),
Oil: WTI $63.87 pb (+0.47%)
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