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...
Stocks Bounce Back As Optimism Returns, Dollar Sags
Stocks bounce back as recovery hopes supersede virus and inflation jitters
Dollar slumps on easing Fed taper worries but inflation bets lift gold
Euro and pound surge as Europe reopens, loonie hits highest in 6 years
Markets buoyed as optimism takes over
Fears about rising virus cases in Asia receded...
The Dollar Index Continues To Fall Amid Expectations The US Rates Will Stay Low For Longer
On Monday, major stock indices around the world declined slightly. There is a strong correlation of the world indices from the dynamics of the US indices now. The Fed will hold the FOMC Meeting on Wednesday, which will shed light on monetary policy prospects going forward, so investors are...
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....
ECB Villeroy: No risk of durable return of inflation in Eurozone
ECB Governing Council member Francois Villeroy de Galhau said in a webcast, "as of today, there is no risk of a durable return of inflation in the euro zone and therefore, it goes without saying, there is no doubt that the monetary policy of the ECB will remain very...
Too Soon To Talk About Tapering
Market movers today
There are no market moving data releases scheduled for today, but ECB's Lagarde and Villeroy, as well as Fed's Kaplan, will be on the wires.
The German constitutional court (GCC) will meet today and give a final verdict on the legality of the ECB's PSPP programme.
The...
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...
This Week, Investors Are Waiting For FOMC Minutes To Understand Te Central Bank’s Next Steps
The US stock market rose on Friday, but the week closed in the red zone. Last week, the Fed officials said that the inflation growth would be temporary and promised not to change the monetary policy. But many experts believe the high inflation rate will have a significant impact...
Weekly Economic & Financial Commentary: Reopening Comes with a Steep Price Tag
Summary
United States: Reopening Comes with a Steep Price Tag
The leap in consumer prices this week laid bare that challenges in meeting soaring demand come with a cost.
There were few signs of the mismatch between supply and demand beginning to come back into balance. April retail sales were...
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...
Dollar Down, Futures Pare Gain after Poor US Retail Sales
Dollar is under selling pressure against after rather poor retail sales data. US futures also pare back some earlier gains and look vulnerable. Yen is currently following the greenback as the second weakest, while commodity currencies are the strongest, together with Euro. The question now is, whether Dollar's decline...
ECB: Future pace of PEPP purchases data-dependent, and based on assessment of financing conditions and inflation outlook
In the accounts of April 21-22 meeting, ECB said that risk-free interest rates and sovereign bond yields had "largely moved sideways" since March and "decoupled from developments in US markets" since late February. Broader lending conditions have "remained favorable".
"This was widely seen as validating the Governing Council's March decision...
European Open: Bullish Candles Form On European Indices
Asian equities were mostly higher overnight thanks to a positive lead from Wall Street, after Fed members calmed market nerves of rising inflation, helping equities to snap a three-day losing streak.
Asian Indices:
Australia's ASX 200 index rose by 64.9 points (0.93%) and currently trades at 7,047.60
Japan's Nikkei 225...
Euro Falls as US Inflation Soars
The euro has posted considerable losses on Wednesday. In the North American session, EUR/USD is trading at 1.2076, down 0.60%.
US inflation higher than expected
There was plenty of anticipation ahead of the April inflation report, and it certainly did not disappoint, with readings much higher than the consensus. Headline CPI rose...
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%...
Focus On US CPI
Market movers today
On the data front, the most important release of the day will be the US April CPI. While base effects will continue to distort the US inflation figures higher on a y/y basis, markets will focus on any signs of faster underlying inflation pressure. April inflation...
European Open: GBP Steady Ahead Of GDP, USD Rises Into CPI
The pound is holding onto gains ahead of UK’s data dump at 7:00 BST, whilst the dollar corrects higher ahead of today’s inflation report.
Asian Indices:
Australia's ASX 200 index fell by -80.3 points (-1.13%) and currently trades at 7,016.70
Japan's Nikkei 225 index has fallen by -549.83 points (-1.92%)...
Dollar Recovers But Not Turning Around Yet, Sterling Firm
Dollar recovers broadly today even though Fed officials sung a chorus emphasizing patience in monetary policy. Canadian Dollar is also firm with help from rebound in oil prices. On the other hand, Australian Dollar is trading generally lower together with Kiwi. Nevertheless, for the week so far, Sterling remains...
ECB Knot expects more than 4% growth over the full year
ECB Governing Council member Klaas Knot said yesterday, "we can take comfort that the euro area in the coming months will take the exact same trajectory, services will also pick up, we expect more than 4% growth over the full year." Further, he added, "I would argue that there...
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...
Euro Up on Strong Economic Sentiment, Global Stocks in Deep Red
Tech led global equities selloff is a major theme today, spreading from Asia to Europe to the US. In the background, there seems to be heightened concerns on inflation over surging commodity prices. European indexes are all in deep red while NASDAQ future is down another -1.6%. The reactions...
Inflation Fears Dominate
European stocks are tanking lower after a weak handover from Wall Street. Inflation concerns sent tech stocks tumbling overnight, and the sector has come under pressure in Europe today. Commodity prices have surged recently amid reopening optimism and infrastructure spending expectations. Copper trades at an all-time high, and base-metal...
German ZEW jumped to 84.4, highest in two decades
Germany ZEW Economic Sentiment jumped to 84.4 in May, up from 70.7, well above expectation of 71.0. That's the highest level since in two decades since 2000. Germany Current Situation index improved to -40.1, from -48.8, above expectation of -42.6. Eurozone Economic Sentiment rose to 84.0, up from 66.3,...
ECB Villeroy: Any suggestion of reduction in PEPP is purely speculative
ECB Governing Council member Francois Villeroy de Galhau the PEPP asset purchase program will continue until at least March 2022. "Any suggestion of a reduction in our purchases before then - what is sometimes called by the technical term tapering or phasing-out - is purely speculative", he said.
He added...
European Open: GBP Holds Onto Gains, China PPI Rips Higher
Those in the ‘inflation is coming' camp will take solace in China's producer prices which rose to a 3-year high. Elsewhere, GBP remains anchored to highs after a strong bullish session yesterday.
Asian Indices:
Australia's ASX 200 index fell by -80.1 points (-1.12%) and currently trades at 7,092.70
Japan's Nikkei...