May 6, 2019

Daily Market Review – Monday, May 6, 2019

Daily Market Review – Monday, May 6, 2019

Asia

Despite a better-than-expected Caixin Services PMI overnight from China, Asian markets this morning are severely red, following US trade threats and market reactions at the end of the US session Friday. The Wall Street Journal reported Sunday that China may pull out of talks, scheduled to resume this week. Housing in Australia is under pressure, as Friday’s building permits for March contracted by double the rate the month before YoY, the monthly reading plunging from a positive 19.1% to negative 15.5%. The Australian dollar plunged nearly 50 pips on the announcement.

Europe

With services PMIs coming in this morning from across the Eurozone, markets ended last week mainly up by up to half a point. Consumer inflation was up year-on-year from 0.8% in March to 1.2% this past month, but producer inflation lost a tenth, coming in at 2.9% in March. Due to today’s banking holiday, Markit published Britain’s services PMI on Friday showing an increase to 50.4 in April from 48.9, on expectations of a tenth point higher.

US

The US dollar index is warily recovering after last week’s 60 cent plunge. US President Donald Trump tweeted Thursday that he was imposing 25% tariffs on Chinese goods Friday, despite expectations of an upcoming deal. US markets presented some mixed employment data on Friday, the NFP producing an excellent 263K new jobs, but hourly earnings and weekly hours disappointingly flat and the participation rate down 2 ticks. Markit’s services PMI didn’t drop as far as expected in April, but the ISM non-manufacturing reading delivered a half point contraction.

Commodities

A 2-rig increase in the Baker Hughes count Friday was preceded by a dollar 30 drop in prices on Thursday’s humongous EIA build in natural gas stocks – 123bm3, following a 9.93mB increase in oil inventories the day before. Our present range is at 60.50. Meanwhile, gold is back in the 1284 region after adding a quick $14 before the end of the week. And Bitcoin is describing a new range between5637 and 5713 after bouncing down from resistance at 5812 on Thursday. Still, the uptrend that began at the beginning of the year appears to be confirming itself, especially as the Nasdaq adds another crypto index to its inventory – this one for XRP – and CoinDesk reports that US residents can now receive income tax refunds in Bitcoin.

Shares

HSBC’s shares are up $13 after the bank’s earnings announcement Friday – a great success, beating expectations on both earnings and revenue; while Adidas posted a 17% increase in profits, pushing shares up 7% in Germany. As expected, Berkshire Hathaway’s performance was not as brilliant, EPS coming in on expectations and revenues missing the expected $61.86bn by $1.18bn. Finally, May 10th has been set for Uber’s IPO, which at a $91bn valuation is expected to be the largest in high-tech history.

Events

08:00 AM GMT – EU Markit Services & Composite PMIs (Apr), Sentix Investor Confidence at 08:30, and Retail Sales (Mar) at 09:00
13:30 PM GMT – US Philadelphia Fed’s Patrick Harker speech
17:45 PM GMT – Canada BoC’s Governor Stephan Poloz speech
22:30 PM GMT – Australia AiG Performance of Construction Index (Apr), Retail Sales & Trade Balance at 1:30 tomorrow morning, and RBA Interest Rate at 04:30
00:30 AM GMT (+1) – Japan Nikkei Manufacturing PMI (Apr)

For more, visit our Economic Calendar