US-China trade talks are set to resume next week. On the agenda, according to the White House, “intellectual property, forced technology transfer, non-tariff barriers, agriculture, services, purchases, and enforcement” … in short – the sticky points. Asian markets were mainly unimpressed with earnings-inspired rises in US markets yesterday. Only the Shenzhen Composite managed to eke out 0.74%, while the Hang Seng ended down 0.4% and the Nikkei lost a 1/3%. News from Japan continues to be dire, with industrial activity contracting by 0.2% and the leading economic index missing expectations at 97.1. In Australia overnight, weak Q1 consumer indexes pressured the Aussie downward nearly 80 cents against the USD, increasing chances for an RBA interest rate cut next month. The CPI rose a mere 1.3% – 2/10ths less than expected.
The Euro plunged another 50 pips as the holiday weekend drew to a close yesterday after the preliminary consumer confidence in the zone for April contracted to 7.9. France this morning produced a 2 point drop in its business climate indicator. As the search for a replacement for BoE Gov. Carney begins and the Brexit chronicles re-emerge starring May and Corbyn cross firing at one another, the pound followed the Euro south. The FTSE, on the other hand, produced a nice 70-point increase since trading reopened after Ester Monday’s banking holiday.
US indexes closed at record highs last night – the S&P500 nearly a percent higher than its September record and the Nasdaq 11 points higher than its record in August on excellent earnings reports from the likes of Twitter and Coca Cola. The dollar index added 40 cents on 692K new home sales in March, putting the change at 4.5% rather than the expected 2.5% decline – this after Monday’s existing home sales contracted by 4.9% after February’s 11.2% increase. Conversely the Richmond manufacturing index in April fell to 3 from last month’s 10.
Oil lost its upward momentum yesterday after the API reported a 6.9mB inventories rise. Although losing 2-days’ worth of gains, though, the general trend continues slightly upward – at least until tonight’s EIA report.
US equities are higher this morning on excellent reports from Procter & Gamble, Twitter and Coca Cola – all beating expectations. SAP also beat expectations while Verizon’s missed on revenue, with EPS flat. Twitter is ascribing its success to increased advertising income based on its efforts to weed out abuse. Later today, we’re expecting Microsoft, Tesla and AT&T to improve on last year’s, while figures for quarter Facebook are expected to show increased revenues, but a 4.7% decline in earnings per share. Boeing will almost certainly be marred by its earlier MAX-woes. Yesterday, The Street’s Richard Suttmeier placed a strong sell signal on Boeing stocks, indicating that the 737MAX fix was being held back despite company officials claims to the contrary, while the 787 Dreamliner production “was facing quality control issues”.
|08:00 AM GMT – Germany||IFO – Expectations, Business Climate & Current Assessment (Apr)|
|08:00 AM GMT – Italy||Trade Balance non-EU (Mar)|
|08:30 AM GMT – UK||Public Sector Net Borrowing (Mar)|
|11:00 AM GMT – US||MBA Mortgage Applications (Apr 19)|
|14:00 PM GMT – Canada||Monetary Policy Report, Interest Rate Decision and Press Conference (14:15)|
|14:30 PM GMT – OIL||EIA Crude Oil Stocks Change (Apr 19)|
|23:50 PM GMT – Japan||Foreign Investment in Japan Stocks & Bonds (Apr 19), and Monetary Policy Statement, Interest Rate Decision & Outlook at 2:00 AM (+1)|
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