Wed, May 19, 2021 @ 00:08 GMT
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Sunset Market Commentary

Markets Similar market dynamics are at play as yesterday in absence of key eco/event news. US housing starts unexpectedly fell by 9.5% m/m, but they did surge nearly 20% in March. Building permits (+0.3% m/m) printed near consensus. The data had no impact. European stocks managed a firm start but...

Dollar Selloff Intensifies, European Majors Winning

Dollar's selloff intensifies today as risk-on sentiment is slowly coming back to the markets. Yen is following as the next weakest. European majors are currently the main winners. Commodity currencies are somewhat lagging behind. In other markets, European indexes are trading slightly higher while US futures also point to...

Eurozone GDP dropped -0.6% qoq in Q1, EU down -0.4% qoq

According to the flash estimate by Eurostats, Eurozone GDP contracted -0.6% qoq in Q1, matched expectations. Compared with the same quarter of the previous year, GDP dropped 1.8% yoy. Employment dropped -0.3% qoq, -2.1% yoy. EU GDP dropped -0.4% qoq, -1.7% yoy. Employment dropped -0.3% qoq, -1.8% yoy. Full release here....

Sunset Market Commentary

Markets: The inflation storm gradually cooled at the end of last week. Measures of US financial inflation expectations, including the breakeven inflation (10-y, 2.54%) and inflation swaps (10-y 2.65%) eased slightly off multi-year peak levels. EMU inflation swaps (10-y 1.67%) stay within reach of the 2018 top. Friday’s ‘ceasefire’ triggered...

Weak Risk Sentiment Supporting Dollar, For Now

Commodity currencies are trading as the weaker ones for today so far, as risk markets turn softer. Major European indexes are in slight red,. while US futures point to lower open. Yen is currently the stronger ones, followed by Swiss Franc and then Dollar. But overall, major pairs and...

EU and US to hold China’s trade-distorting policies to account

EU said they will temporarily suspend the increase of its rebalancing measures on the US 232 steel and aluminum tariffs, imposed during the era of former US President Donald Trump. EU said, "this gives us space to find joint solutions to this dispute and tackle global excess capacity". In the...

Week Ahead – Will the Bond Market Remain in a Holding Pattern?

Financial markets seem to be constantly recalibrating. The economic data is expected to be volatile and that should support the Fed’s patient stance on waiting for enough data to make a clear assessment over pricing pressures and the strength of the labor market recovery. Inflation expectations are weighing on sentiment,...

Week Ahead – Inflation Scare Shakes Markets, European PMIs Next

It was a wild week in financial markets. Stocks got smoked while the dollar clawed back some ground as inflation finally showed its teeth, reigniting worries about higher interest rates being on the horizon. The upcoming week seems calmer. There are no central bank meetings and the minutes of...

Sunset Market Commentary

Markets Consensus-crushing US CPI figures sent jolts through markets today. Headline inflation for April jumped 0.8% m/m to reach a whopping 4.2% y/y vs. 3.6% expected. That’s the fastest pace since September 2008. Core measures accelerated with 0.9% m/m (0.3% consensus) to a 2.5 decade (!) high of 3% y/y,...

Dollar Spikes Higher after Strong Inflation, But No Follow Through Buying Yet

Dollar rebound strongly in early US session after much stronger than expected consumer inflation data. But Canadian Dollar is even stronger with help from extended rebound in oil price. Sterling is the third strongest, as supported by stronger than expected GDP. On the other hand, New Zealand and Australian...

EU upgrades 2021, 2022 growth forecast, shadow of COVID-19 beginning to lift

In the Spring 2021 Economic forecast of European Commission, Eurozone GDP forecast was upgraded up to 4.3% in 2021 (from 3.8), and 4.4% in 2022 (from 3.8%). Eurozone inflation is projected to jumped to 1.7% in 2021, but fall back to 1.3% in 2022. Eurozone unemployment rate is projected...

Eurozone industrial production rose only 0.1% mom in Mar, EU up 0.6% mom

Eurozone industrial production rose only 0.1% mom in March, well below expectation of 0.6% mom. Production of non-durable consumer goods rose by 1.9%, energy by 1.2% and intermediate goods by 0.6%, while production of capital goods fell by -1.0% and durable consumer goods by -1.2% EU industrial production rose 0.6%...

Sunset Market Commentary

Markets Asian and European markets today had to cope with growing worries on inflation that haunted US (equity) markets later in the session yesterday. European equities lose up to 2.5%. US indices are ceding another 1% (Dow) to 1.6% (Nasdaq) soon after the open. Investors apparently reached the point where...

Slow Day With ZEW In Focus

Market movers today The German ZEW index for May is due for release, we expect the figures to paint a constructive picture of the ongoing recovery. We will also have a number of Fed speeches in the evening, including Williams, Brainard, Daly, Bostic, Harker and Kashkari. In Poland, the...

Euro Pauses after Strong Week

The euro is coming off a strong week, with gains of 1.19 per cent. EUR/USD soared on Friday with gains of 0.81%, buoyed by the poor performance for US nonfarm payrolls. On the fundamental front, Germany releases ZEW Economic Sentiment on Tuesday (9:00 GMT). The indicator slowed to 70.6 in...

Sunset Market Commentary

Markets Sterling outperforms on FX markets today after Scottish parliamentary elections removed short term political risk. PM Sturgeon’s SNP came one seat short of an outright majority, denting her independence claim. However, together with pro-independent Greens, Holyrood will definitively give it its best shot. Sturgeon said she’ll seek a referendum...

Week Ahead – Dollar Declines after Massive Payrolls Miss; Focus Shifts to Inflation

Wall Street went on a wild ride after a huge nonfarm payroll report miss reaffirms the Fed’s stance to do nothing. A massive slowdown in hiring was not expected and the knee-jerk reaction across the bond market might have paved the way for further dollar weakness. The US economic...

Sunset Market Commentary

Markets We’ll jump straight to today’s main event: stellar US payrolls! Or at least that’s what markets were expecting. The actual figure of 266k job growth didn’t even come near to the one million consensus. To make it even worse, last month’s 916k was revised down to 770k. April job...

German industrial production rose 2.5% in March, France industrial output up 0.8% mom

Germany industrial production rose 2.5% mom in March, versus expectation of 2.0% mom. Compared with February 2020, the month before the pandemic, production was still -4.3% lower in seasonally and calendar adjusted terms. Exports rose 6.5% mom while exports rose 1.2% mom. Trade surplus came in at EUR 14.3B. France...

Sunset Market Commentary

Markets The Bank of England published its much-anticipated May inflation report today. The document didn’t alter the MPC’s policy stance. All parameters remain unchanged. The policy rate stands at 0.1% with targets of asset purchase programmes being £875bn and £20bn respectively for UK Gilts and for corporate bonds. Chief economist...

Sunset Market Commentary

Markets (European) equity markets this morning quite easily found their composure after yesterday’s sudden, tech-driven setback. Still, that move  contained a warning that the debate on potential consequences of rising inflation might become a growing source of uncertainty/rising market volatility. European stocks currently are rebounding between 1.0% and 1.5%+. US...

Canadian Dollar Higher With Commodity Currencies, Euro Weakens

Commodity currencies continue to trade as the stronger ones entering into US session. In particular, Canadian is helped by extended rally in oil prices. New Zealand Dollar continues to receive support from better than expected job data. Overall sentiments are positive with European stocks staging a rebound, while US...

Eurozone PPI rose 1.1% om, 4.3% yoy in March, EU at 1.2% mom, 4.5% yoy

Eurozone PPI rose 1.1% mom, 4.3% yoy in March, above expectation of 0.9% mom, 4.0% yoy. For the month, Industrial producer prices increased by 2.0% in the energy sector, by 1.3% for intermediate goods, by 0.8% for non-durable consumer goods, by 0.3% for capital goods and by 0.2% for...

Eurozone PMI composite finalized at 53.8, out of double-dip recession in Q2

Eurozone PMI Services was finalized at 50.5 in April, up from March's 49.6. PMI Composite was finalized at 53.8, up from March's 53.2. Latest data indicated fastest expansion since last July and the second best in over two-and -a-half years. Chris Williamson, Chief Business Economist at IHS Markit said: "April's...

Germany PMI services finalized at 49.9 in Apr, recovery stopped in its tracks

Germany PMI Services was finalized at  49.9 in April 49.9 in April, down from March's 51.5, back below the 50 no-change threshold. PMI Composite stayed strong at 55.8, despite retreating from March's 37-month high of 57.3. Phil Smith, Economics Associate Director at IHS Markit said: "The tightening of COVID-19 lockdown...

France PMI services finalized at 50.3 in Apr, first expansion in eight months

France PMI Services was finalized at 50.3 in April, up from march's 48.2. That's the first expansion reading in eight months. PMI Composite was finalized at 51.6, up from 50.0 in March, first expansion for eight months too. Eliot Kerr, Economist at IHS Markit said: "The key takeaway from the...

Sunset Market Commentary

Markets Investors struggled a bit for direction today ahead of important data tomorrow (US services ISM and ADP employment) and Friday (official payrolls report) and a slew of events (Norges Bank, Czech National bank, Bank of England and Scottish parliamentary elections) in between. For today’s data, we retain yet another...

Travel and Tourism Stocks Lift European Bourses; UK Manufacturing Activity Surges

European stocks are trading broadly higher on Tuesday for a second consecutive session, as reopening optimism keeps sentiment elevated. As vaccine rates ramp up in the region, confidence is growing over the economic recovery. News that the European Commission is taking steps to reopen the continent in time for the...

Euro Rebounds on Superb German Retail Sales

The euro is in positive territory on Monday. In the North American session, EUR/USD is trading at 1.2050, up 0.43% on the day. Germany, the eurozone’s largest economy, impressed with a Retail Sales report for March that crushed the consensus. The gain of 7.7%, which followed a 1.2% gain, easily...

Sunset Market Commentary

Markets Today’s most eye-popping development came at the start of EU dealings on EU rate markets. Curves rapidly started bear steepening, lifting long term yields to fresh recovery highs. The German 30-yr yield even tested the 2020 high (0.38%) for a first time. In absence of eco data – apart...