With expectations for tonight’s Chinese data to continue showing a slight improvement, Asian markets this morning are closing nicely in the green, led by the Shanghai Composite’s +1.6% and stopping just short of 9-month highs. Housing prices in the Middle Kingdom rose to 10.6% in March – a tenth up from February. The Yen overnight reversed into a very faint upward trend despite a drop into negative territory for the tertiary industry index, -0.6%, as traders expect a slight upswing in tonight’s trade balance data. Central banker Haruhiko Kuroda said this morning that monetary easing would continue so long as inflation remains below the 2% target and in light of falling bank profitability. The Australian dollar lost 30 cents as the RBA expressed concern for inflation, hinting at a possible rate cut at its next meeting.
As we prepare for the EU’s and Germany’s ZEW sentiment findings this morning, European markets last night closed the day with meagre gains – about a tenth across the board with the FTSE ending flat. The pound continues edging upward with UK employment data expected this morning to show a slight improvement. The EU yesterday announced it was prepared to begin negotiations with the US on trade tariffs but would not be discussing agricultural products – the main stumbling block. All governments are in agreement, though, that negotiations would not be concluded before the US remove all tariffs on steel and aluminium, that it would suspend talks the moment Trump adds cars to the list, and has published its own list of products to be taxed to the tune of 20 bn Euros in retaliation for Trump’s overtures. And in Brexit news, US House Speaker Nancy Pelosi yesterday warned that a hard border in Ireland would prevent a trade deal between the US and the UK.
Chicago FED head Charles Evans yesterday stomped on the USD saying that interest rates could conceivably be maintained until next year, owing to moderate inflation. Still, yesterday’s Empire State Manufacturing Index nearly tripled in April to 10.1, but equities ended just south of zero yesterday, the DJ losing 140 points in the morning and regaining half of that in the afternoon session.
Ahead of tonight’s API crude count, oil is trading below its 20- and 50-hour moving averages, with support for now at 63.20.
JP Morgan’s excellent data now history, Goldman Sachs yesterday reported a 20% drop in Q1 earnings, while Citi missed expectations by half a billion USD. Earnings for the latter rose thanks to a share buyback. Analysts are optimistic for Bank of America but less so for Johnson & Johnson.
|08:30 AM GMT – UK||ILO Unemployment Rate, Claimant Count Change and Average Earnings (Feb)|
|09:00 – AM GMT – EU & Germany||ZEW Survey – Economic Sentiment & Construction Output (Feb)|
|12:30 PM GMT – Canada||Manufacturing Shipments & Portfolio Investment (Feb)|
|12:55 PM GMT – US||Redbook Index, Industrial Production (13:15) & NAHB Housing Market Index (14:00)|
|20:30 PM GMT – OIL||API Weekly Crude Oil Stock (Apr 12)|
|22:45 PM GMT – NZ||Consumer Price Index (Q1)|
|23:50 PM GMT – Japan||Merchandise Trade Balance, Imports & Exports (Mar), and Industrial Production (04:30)|
|02:00 AM GMT (+1) – China||Retail Sales, Industrial Production, Fixed Asset Investment GDP & Foreign Direct Investment (Mar)|
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