Sunset Market Commentary
Markets
While the rise in coronavirus cases in China and some European countries seems to be slowing by the day, the amount of deaths is still increasing in many areas, including the US. It creates a difficult setting in which investors find themselves often in a straddle.
Today’s initial risk mood...
Eurozone PMI composite finalized at 29.7, GDP contracting near to -10% annualized
Eurozone PMI Services was finalized at 26.4 in March, down from February's 52.6. PMI Composite was finalized at 29.7, own from February's 51.6. that's the biggest single monthly fall, as well as a survey record low. Looking at some member states, Germany PMI Composite dropped to 35.0, France to...
Manufacturing PMI and Inflation in the Eurozone Reveal that Eurozone is Approaching Recession
Latest indicators for virus-haunted Eurozone’s economic developments suggest that the region is very close to recession. While accelerating QE, ECB refrained from lowering the policy rate March. We expect it would be obliged to do so in April. Meanwhile, coordinated fiscal action by the European Commission might be needed...
Eurozone PMI manufacturing finalized at 44.5, still some way off peak decline
Eurozone PMI Manufacturing was finalized at 44.5 in March, down from February's 29.2. Markit noted that coronavirus related shutdowns drove output and orders lower. There was record deterioration in supplier delivery performance.
Among the member states, Italy hit 131-month low at 40.3. Greece hit 55-month low at 42.5. France hit...
Dollar Showing Signs of Rebound While Other Markets Consolidate
Markets continue to staying in tight range today as consolidations continue. There is still no end in sight regarding the coronavirus pandemic, with confirmed cases breaking 800k handle, and deaths above 39k. Movements in the major stock indexes are mild based on recent standard. WTI crude oil is back...
France consumption dropped -0.1% in Feb, CPI slowed to 0.6% in Mar
France household consumption expenditure on goods dropped -0.1% mom in February. Energy expenditure fell again (0.9%), manufactured good consumption rebounded (0.2%), driven by durable good purchases (1.4%) and food consumption was stable (0.0%).
All item CPI slowed to 0.6% yoy in March, down from 1.4%. HICP slowed to 0.7% yoy,...
Eurozone economic sentiment had record monthly decline, before most coronavirus containment measures
Eurozone Economic Sentiment Indicator dropped to 94.5 in March, down from 103.4. Industrial Confidence dropped form -6.2 to -10.8. Services Confidence dropped from 11.1 to -2.2. Consumer Confidence dropped from -6.6 to -11.6. Retail Trade Confidence dropped from -0.2 to -8.3. Even Construction Confidence dropped from 5.4. to 2.7.
The...
Markets Shrug Disastrous PMIs, Continue to Digest Recent Moves
PMI data released together generally showed a disastrous picture in the service sectors around the world, due to coronavirus pandemic and the measures to contain it. Nevertheless, these data are generally shrugged off as they're generally expected. Reactions would likely be muted too even if the data come in...
France PMI composite dropped to 30.2, GDP collapse rate approaching double digits
France PMI Manufacturing dropped to 42.9 in March, down from 49.7, hitting a 86-month low. PMI Services plummeted to 29.0, down from 52.6, hitting series low. PMI Composite dropped to 30.2, down from 51.9, also a record low. The data suggested that French private sector activity contracted at the...
ECB wins European praises as Italian yields fall too
ECB's massive EUR 750B Pandemic Emergency Purchase Programme announced overnight won praises from top European politicians. French President Emmanuel Macron said he gives "full support for the exceptional measures taken this evening by the ECB." He added,"it is now up to us, the European states, to step up to the...
Eurozone PMI manufacturing finalized at 49.2, encouraging signs despite coronavirus risks
Eurozone PMI Manufacturing was finalized at 49.2 in February, up from January's 47.9. Markit noted that output and new orders declined at slower rates. Average lead times lengthened market as firms utilized inventories. Looking at the member states, readings in France (49.8), Italy (48.7) and Germany (47.8) remained in...
European Majors Recover after UK and Eurozone PMIs
European majors recover today following better than expected PMI data from UK and Eurozone. Concerns of China's coronavirus hasn't materialized into business confidence data yet. On the other hand, commodity currencies are generally lower, followed by Dollar. For the week, while New Zealand and Australian Dollars are among the...
France PMI composite rose slightly to 51.9, faster growth solely attributed to services
France PMI Manufacturing dropped to 49.7 in February, down from 51.1, missed expectation of 50.7. It's a 7-month low and back in contraction region. PMI Services, on the other hand, rose to 52.6, up from 51.0, beat expectation of 51.2. PMI Composite rose to 51.9, up from 51.5.
Commenting on...
Eurozone PMI manufacturing finalized at 47.9, green shoots of recovery in sight
Eurozone PMI Manufacturing was finalized at 47.9, up from December's final reading of 46.3. Markit noted there were slower falls in output, new orders and purchasing recorded. Nevertheless, business confidence improved to the highest level in 16 months.
Looking at some member states, Germany, Spain, Italy, Austria and the Netherlands...
France GDP contracted -0.1% qoq in Q4
France GDP dropped -0.1% qoq in Q4, much worse than expectation of 0.3% qoq expansion. On average over 2019, GDP growth slowed to 1.2%, from 1.7% in 2018.
Looking at some details, household consumption expenditure slowed to 0.2% qoq, down from 0.4% qoq. Total gross fixed capital formation slowed sharply...
Euro Area Research: From US-China Trade Ceasefire To US-EU Trade War?
We expect the US administration’s trade policy to shift focus to Europe in 2020, but do not expect a wider EU-US trade war.
We see 30-40% probability of US tariffs on European car imports hitting in H1 20, in light of both political and legal complexities. In the...
Euro and Sterling Dip after PMIs, Dollar and Canadian Firmer
European majors are generally weaker today. Stronger than expected UK PMIs add to the case for BoE to stand pat next week. But the Pound shrugs off the data. Euro also receive no particular support from PMIs, which signals that the economy failed to pick up momentum for recovery....
France PMI composite dropped to 51.5, but private sector stays in expansion in the near term
France PMI Manufacturing rose to 51.0 in January, up from 50.4, beat expectation of 50.5. PMI Services dropped to 51.7, down from 52.4, missed expectation of 52.1. PMI Composite dropped to 51.5, down from 52.0, hitting a 4-month low.
Commenting on the Flash PMI data, Pollyanna De Lima, Principal Economist...
Euro Weakens after Uninspiring ECB, Risk Aversion Dominates With Coronavirus Fears
Euro is trading as one of the weakest major currencies, together with Canadian Dollar, for today. There is little inspiration from ECB rate decision and press conference. Canadian Dollar is weak on free fall in oil price, with WTI pressing 55 handle now. Australian Dollar continues to be the...
France and US agreed to work on digital taxation at OECD
French Finance Minister Bruno Le Maire said France and the US has agreed today on the way to push digital taxation at the OECD level. The bilateral dispute between the two countries on the issue is set aside. The development reduces the risk of US retaliation on France's digital...
US Mnuchin to Italy and UK: Delay digital taxes or face tariffs
US Treasury Secretary Steven Mnuchin urged Italy and UK to suspend their plans to impose digital taxes. Or "if not they'll find themselves faced with President Trump's tariffs." The warning came after France agreed to delay digital tax imposition through the end of the year, as US and France...
Dollar Rises Again after Brief Retreat, EUR/USD Pressing Key Support
Dollar, Canadian and Yen are so far the strongest ones in a relatively quiet day. The greenback is supported by recent data as well as easing trade tension. But as the US economic calendar is ultra light this week, Dollar's fate is likely on others' hands. Canadian Dollar is...
France Le Maire: Strike has very limited impact on GDP
France Economy Minister Bruno Le Maire said the economic impact of strike, which is in its 46th day, will be limited. But still, it could cut Q3 GDP growth by -0.1%.
He told LCI television: "There will be an impact but it will be, I think, limited. Today estimates available...
Dollar Surges Broadly, Aussie Selloff Accelerates
Dollar is trading generally higher today and Middle East tensions seem to be out of traders' mind already, without any new developments. Instead, markets are focusing back on fundamentals and central bank expectations. Thus, Australian and New Zealand Dollars are suffering steep selloff despite return of risk appetite. In...
France sets 15 day deadline to resolve digital tax issue with US
French Finance Minister Bruno Le Maire said he set a deadline of 15 days with US to resolve issues regarding digital tax. He said, "I had a long talk with U.S. Treasury Secretary Steven Mnuchin. We have decided to step up efforts to try and find a compromise, within the...
Eurozone PMI manufacturing finalized at 46.3, a dire end to 2019
Eurozone PMI Manufacturing was finalized at 46.3 in December, down from November reading of 46.9. Markit noted there were accelerated falls in both output and new orders. Also, there was prevalence of spare capacity that led to further job losses.
Looking at the member states, Germany PMI Manufacturing was finalized...
Investors Shrug Poor Eurozone and UK Data, Risk Appetite Continues
Commodity currencies are general higher today, with the help from risk appetite in European markets, and US futures. Poor Eurozone and UK data are largely shrugged off by investors. Canadian Dollar is so far the strongest, additionally supported by mild strength in oil prices. On the other hand, Yen...
France PMI manufacturing dropped but services improved
France PMI Manufacturing dropped to 50.3 in December, down from 51.7, and missed expectation of 51.4. PMI Services rose to 52.4, up from 52.2, and beat expectation of 51.8. PMI Composite dropped slightly to 52.0, down from 52.1.
Commenting on the Flash PMI data, Eliot Kerr, Economist at IHS Markit...
Sunset Market Commentary
Markets
Markets weren’t to keen on any directional positioning ahead of the Fed meeting later today. We don’t expect any material changes to Powell’s assessment of the economy and monetary policy “being in a good place” though. The Fed can find comfort in recent data to maintain a wait-and-see approach:...
Stocks and Dollar Plummet as Trump Say China Trade Deal May Drag On
US stocks futures and Dollar tumble broadly today after US President Trump indicated that he has no deadline for China trade deal, and could even wait until after 2020 election to make it. If the phase one deal is dragged on, through December 15 "natural deadline", new round of...