Asian markets opened the week this morning in a truly optimistic vein after positive Chinese data and a strong opening to quarterly earnings season across the ocean. The Nikkei excelled with a 1.46% increase, followed by more-than a percent each from the mainland, and the Hang Seng trailing at 0.55%. Chinese data continues to indicate a healthy improvement, its trade surplus climbing to 220 bn Yuan – a good quarter more than the expected 178. Exports increased by 21.3%, following February’s 21% contraction, and new loans doubled in March to 1.69bn Yuan – in line with the central bank’s easing policies on local lenders.
The week ended on a healthy upswing in the Euro after EU leaders agreed to begin negotiations with the US on industrial and agricultural tariffs. At present, President Trump is threatening $60 bn return tariffs on European goods as the EU-US trade deficit widens to $157 bn. On Thursday, as expected, most European CPIs came in level with the month before, as industrial production throughout the zone surprised to the upside, with a 0.3% contraction YoY – a third of the expected 1.
Wrapping up a meeting of the World Bank and the International Monetary Fund, US treasury secretary Steven Mnuchin expressed agreement over the weekend with IMF head Christine Lergarde in calling on Germany, Korea, Australia and other countries with a budget surplus to cut taxes and raise spending – this in order to help stimulate a slowing world economy. The secretary also fuelled markets with his optimism on the outcome of US-China trade talks.
This morning, Reuters reports that US negotiators have watered down their demands that China curb subsidies and tax breaks to state-owned industries, which China sees as key engines for long-term economic development. Following some positive jobless claims and producer inflation data Thursday, US import and export price indexes also exceeded expectations the next day – at least on the month-to-month. Michigan University, on the other hand, released a one-point-five-point drop to 96.9 for April’s consumer confidence.
Two more oil rigs went on line Friday, bringing the number up to 833. The result – a loss of 2/3 of the day’s gains, with WTI opening the week at 63.62 after losing an entire dollar during the Asian session. The trend continues sideways as the threat of civil war once again emerges in Libya, on one hand, but OPEC perhaps showing more amenability to President Trump’s wishes to up production in response to shortfalls resulting from US sanctions against Iran and Venezuela. Bitcoin’s April 1st spree seems to have come to an end, levelling out in its new $5,000 region after failing twice to cross the 5200 resistance line. Coinbase, a US-based crypto exchanges, has launched a Visa debit card in conjunction with UK payments processor, PaySafe, which will enable customers throughout the European Union to pay directly from their crypto accounts.
JP Morgan reported earnings Friday, kicking of what we’re expecting to be a fun-packed earnings season. The bank beat estimates by a billion and a quarter, coming in at $29.85bn for the year’s first quarter. EPS also beat expectations by over 10%. Today, more banks lay their necks on the block – specifically Citigroup and Goldman Sachs, with Bank of America tomorrow alongside Johnson & Johnson, and on Thursday morning – American Express followed by Netflix at Nite. Whether results are in fact as good as Morgan indicates or are being propped up by a dovish fed remains to be seen. In a side note, Boeing stock is recovering after company CEO Dennis Muilenburg Friday announced the successful testing of a fix for the troubled Max and the winning of a $14bn contract to refit B-1 and B-52 air-force bombers.
|12:30 PM GMT – US||Empire State Manufacturing Index (Apr)|
|14:30 PM GMT – CAD||Bank of Canada Business Outlook Survey REPORT|
|17:00 PM GMT – US||Chicago Fed’s Charles Evans speech|
|00:00 PM GMT – US||Boston Fed’s Eric Rosengren speech|
|01:30 AM GMT (+1) China||House Price Index (Mar)|
|01:30 AM GMT (+1) AUD||RBA Meeting Minutes|
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