China’s deputy PM Liu He still slated to attend talks in Washington this week despite Trump’s threats to increase tariffs on Chinese imports, this morning’s trade balance shows a marked reduction from $32.67bn in March to $13.84bn in April. Markets throughout the region are down up to 1.43% in Japan. The odd man out, New Zealand, saw the Dow add a quarter percent – this more because of the central bank’s decision to cut interest rates by 25 basis points overnight to 1.50%. In Japan the Yen is up 0.18% despite a drop in the services PMI to 51.8 in April. Last night, the nation’s central bank policy minutes reveal concern over bank profits, hurt by loose monetary policy, and a reluctance to increase stimulus.
Germany woke up this morning to a better-than-expected 0.5% increase in industrial production – a 2 tick drop from February’s 0.7, but not as bad as the 0.5% contraction expected. Britain’s like-for-like retail sales last night expanded by 3.7%, after March’s 1.1% contraction, this atop today’s 0.1% increase in the Halifax House Price index and after yesterday’s billion-point three increase in France’s trade deficit to €5.3 bn in March. In Europe, too, markets were depressed by Trump’s tariff-terror tactics, ending the day down between 1.78% for the Eurostoxx and 0.83% in Switzerland.
Trump’s threats continue to wreak havoc with global equities, the Nasdaq down 1.96% despite a relatively good earnings season that should have pushed markets generally up. Instead, levels are precisely where they were as the reports started coming in a month ago. Nevertheless, yesterday’s Redbook Index shows a 1.3% increase in same-stores sales for May, up from 1.2% the month before. Job openings in March increased by a better-than-expected 7.49 million jobs, but consumer credit fell a third to $10.28bn in March. Downward pressure on the US Dollar is also being provided by reported US military deployments in the Persian Gulf. The Canadian dollar steadied overnight after a hard day yesterday, losing 40 pips on tariff turmoil and weak oil prices.
Oil recovered half of yesterday’s losses overnight and is currently testing the $62 resistance level after yesterday’s API report – about a third of last week’s at 2.8 million barrels. And gold at 1289, continues its 5-day rise after completing a double bottom yesterday, primarily thanks to Trump’s tariff talk, which is sending investors towards safe-haven assets. Bitcoin this morning is trending below the 5800 resistance level, after spiking yesterday at 5920. The crypto’s 20 dMA, though, remains firmly above the slower 100 dMa, confirming that the uptrend is still in place.
BMW shares were down 1.7% yesterday after the beleaguered car manufacturer reported an EPS of 85 cents on revenues of €22.46 bn – down 0.9% YoY. Siemens is expected to report this morning earnings of €23.45 bn – up 2 billion from the previous quarter; and Disney will report tonight after the US session – again, both revenues and earnings expected to be down from the previous quarter.
|11:00 AM GMT – US||MBA Mortgage Applications (May 3)|
|12:15 PM GMT – Canada||Housing Starts s.a (Apr)|
|14:30 PM GMT – OIL||EIA Crude Oil Stocks Change (May 3)|
|23:01 PM GMT – UK||RICS Housing Price Balance (Apr)|
|01:30 AM GMT (+1) – China||Consumer Price Index (Apr)|
|05:00 AM GMT – Japan||Consumer Confidence Index (Apr)|
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