May 13, 2019

Daily Market Review – Monday, May 13, 2019

Daily Market Review – Monday, May 13, 2019

US

Stalled trade talks with China plus some weak data as last week ended have index futures down this morning, led by the Nasdaq’s 1.24% loss following a 100-point bear gap as the Asian session got underway. Echoing Fed Head Jerome Powell’s speech last week, slow price growth is weighing in on inflation, April’s YoY CPI down to 2% and the month’s budget surplus – at $160 bn – missing expectations by $5bn. Jobless claims the day before also missed, the continuing number up by 13K and the initial at 228k. The China spat hit the USD especially hard with a 30 pip bear candle on Thursday and another the following day. Meanwhile, Canada reported a record-breaking increase in jobs – 106.5 in April, pushing the unemployment level down a click to 5.7% with participation rising to 65.9%. Despite an in crease in both exports and imports, the nation’s merchandise trade balance failed to hit the $2.45bn deficit target by 0.75 bn.

Asia

All Chinese imports this morning are now under the threat of a 25% tariff after US Pres D. Trump on Friday increased tariff levels to 25% on $200 bn worth of Chinese imports. The result so far has been a bloodbath in Asian equities, the Shenzhen Composite down 1.76% but the Hang Seng beating the rap with a 0.84% increase. The is up 0.17%Yen as traders seek shelter. Trade talks nevertheless continued Friday towards a deadlock as the US insists that the agreement be implemented into Chinese law legal, a demand that China considers an infringement upon its sovereignty. China has promised retaliatory measures. Further south, Electronic card retail sales in New Zealand rose by 4.5% YoY in April from 0.7% the month before; and home loans in Australia contracted 2.5% in March, following a 1.4% increase the month before. The AUD was down 75 pips on the announcement.

Europe

European indexes ended the week in the green led by the DAX’s 0.72% rise thanks to a surprising €20.0 bn trade surplus based on a 1.5% surge in exports. The FTSE ended down 0.06% despite excellent data from the UK on Friday – manufacturing YoY more than doubling to 2.6%, industrial production up in March to 1.3% from February’s 0.4%. Business investments QoQ increased during Q1 from a 0.9% contraction to plus .5%, and the non-EU trade deficit fell to £4.361 bn., bringing the total count to £-5.4 bn. GDP disappointed with a 0.1% contraction in March.

Commodities

After crossing the 6000 mark last week, Bitcoin continues to surge – 9% in the past day pushing it past 7k, where this morning we find it consolidating… for now. And oil continues sideways around the $62 level after Baker Hughes reported a 2-rig drop in active oil wells Friday.

Shares

Despite the hype last week, Uber’s mega-offering ended with a whimper – shares down more than 7% by the end of the trading day. Traders are divided between the positive, who remind us that Facebook – now 400% its original value – took a year to take off, and the negative, who believe the IPO is following Lyft’s 30% drop since its IPO 2 months ago. Meanwhile, German green energy firm e.on this morning reported quarterly earnings down 8% to 1.67 euros, but beating expectations thanks to its renewable energy projects in Turkey. The big day this week is Wednesday, with both Cisco and Alibaba on the earnings block

Events

13:10 PM GMT – US Boston Fed’s Eric Rosengren and Vice Fed Head Richard Clarida speeches
21:30 PM GMT – Canada BoC Dep Gov Timothy Lane Speech
22:45 PM GMT – NZ Visitor Arrivals (YoY) (Mar)
23:50 PM GMT – Japan Bank Lending (YoY) (Apr), Current Account and Trade Balance (Mar)
01:30 AM GMT – Australia National Australia Bank’s Business Conditions & Confidence (Apr)

For more, visit our Economic Calendar