Mon, Apr 19, 2021 @ 14:48 GMT
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Sunset Market Commentary

Markets The long end of the European yield curve took off where it left on Friday: rising and underperforming against the US. The EU 10y swap rate trades north of 0.10% for only the second time since March 2020, trying to force a break higher out of a closing triangle...

Dollar Selloff Resumes and Accelerates, Sterling Gaining Most For Now

Euro finally breaks through 1.2 handle against Dollar, as the greenback's selloff resumes today and accelerates broadly. Nevertheless, Euro is overwhelmed by others, in particular Sterling, which is the strongest for now, followed by Swiss Franc. Commodity currencies are somewhat lagging behind too, partly as they're facing some pressure...

Bundesbank: Germany economic output decreased in Q1

In the monthly report, Bundesbank said Germany economic output decreased in Q1. Stricter and longer-lasting restrictions increased the losses in many service sectors. Industrial production fell in February as "supply bottlenecks for preliminary products must have played an important role in the decline." Automotive industry was "particularly hard hit". However,...

DAX Outlook: DAX Is Consolidating Under New Record High, Further Advance Likely

The Dax is trading within narrow consolidation under new all-time high on Monday, following 1.5% rally last Friday (the biggest one-day gains since March 8). Global stocks remain underpinned by expectations that major world central banks will maintain ultra-loose monetary policies for an extended period of time, while encouraging signs...

German Politics And Stand-Off With Russia In Focus While Waiting For ECB

Market movers today Today: A quiet start to the week in terms of economic data, no key releases are scheduled for today. There won't be speeches from ECB or Fed either, as both central banks have entered blackout periods ahead of upcoming meetings. During the week: Later in the...

Pull Back in Treasury Yields Boosted Stocks to New Record, Dollar Set Up for More Downside

Dollar tumbled broadly again as falling treasury yield pushed US and German stocks to new record highs. Near term trend in the greenback should have reversed, but it's unsure whether it's ready for medium term down trend resumption yet. At least, EUR/USD will have to break through 1.2 handle...

Sunset Market Commentary

Markets The better the US eco data get, the more adverse the market reaction becomes. It fits with the view that markets turned into reflation hibernation at the start of Q2 2021. Markets finally aligned with the Fed’s message not to frontrun on policy normalization any time soon. The US...

ECB Preview: An Appetizer For The June Meeting

The ECB meeting on Thursday next week will be a stock taking meeting with focus on the resilient economic data and positive outlook for coming months while Lagarde will face questions on the recent PEPP purchase behaviour. The PEPP data has only shown an uptick in gross purchase pace...

Sunset Market Commentary

Markets Not much news today. The economic calendar was all but empty and high-profile Fed speeches are not due until later today. Denmark is dropping the use of the AstraZeneca completely from its vaccination programme. Other (mainly EU) countries might follow this example. The news follows yesterday’s setback in the...

Dollar and Stocks Lower on J&J Vaccine Pause, Euro Rises

Dollar trades mildly lower entering into US session, after US FDA and CDC recommend pause of J&J COVID-19 vaccines on blood clot issue. DOW futures also turn south and point to slightly lower open. Meanwhile, UK Prime Minister Boris Johnson also warned that the fall in infections was due...

German ZEW economic sentiment dropped to 70.0, somewhat less euphoric

German ZEW Economic Sentiment dropped to 70.7 in April, down from 76.6, below expectation of 79.5. That's the first decline since November. Current Situation index improved to -48.8, up from -61.0, above expectation of -52.0. Eurozone ZEW Economic Sentiment dropped to 66.3, down from 74.0, below expectation of 73.2....

Would The Report Mark The Start Of A Base Effect Driven Jump Inflation?

Markets Markets started the week in wait-and-see modus ahead of key upcoming events including the US mid-month refinancing, US (inflation) data and the start of the earnings season. A risk-off start in Asia had only a limited impact. US and European indices lost less than 0.5%, which isn’t that bad...

Week Ahead – US and China Data Could Reinforce Optimism but RBNZ to Sound Caution

As the dollar recedes on some scepticism around the aggressive bets of an early Fed tightening, US inflation and retail sales numbers due in the coming week could reignite those expectations. There could be a further boost to the global recovery outlook if Chinese GDP figures point to strong...

Weekly Focus – Wait and See Mode for Central Banks

US yields have taken a step back this week causing a weaker USD. Some profit taking might also play a role for the USD following a few very strong months. In Europe, bunds moved sideways. Equities have continued to edge higher on a global scale and US markets hit...

Germany Heading For Contraction, FTSE Pauses For Breath

Despite a fresh record high for the S&P overnight, European stocks are subdued on the final day of trading for the week. Concerns over the sluggish vaccine rollout in Europe and its impact on the region’s economic recovery are dragging on risk sentiment, overshadowing a dovish-sounding Fed Chair Powell. Federal...

Equities Higher On Dovish Fed Comments

Market movers today German industrial production for February will likely increase amid strong momentum for the German manufacturing sector. The US PPI inflation is likely to jump significantly to 3.8% in March mainly due to base effects and higher energy prices. The 60 second overview ECB minutes: ECB had a slightly...

Rotational Spin

US markets paused for breath overnight, with Wall Street easing slightly after a frenzied Monday session. Rotational spin was the theme of the day, and yesterday's lucky recipient was the European Union, with markets delivering the author a slap in the face after yesterday's note. Having driven US markets...

Eurozone PMI composite finalized at 53.2, increasingly adapted to life with the virus

Eurozone PMI Services was finalized at 49.6 in March up from February's 45.7. PMI Composite was finalized at 53.2, up from prior month's 48.8, highest level since last July. Looking at some member states, Germany PMI Composite was finalized at 57.3, a 37-month high. Ireland PMI Composite rose to...

Sunset Market Commentary

Markets Returning from the long Easter weekend, European investors started the week navigating through several sets of (exceptionally) strong US data published late last week and yesterday. However, as was the case for US trading yesterday, European markets also didn’t find an unequivocal script to follow. Strong US ISM’s and...

Recovery Optimism Sends Dax to Record High

Dax, FTSE gain ground European stocks are bounding higher on Tuesday, rallying to record levels on signs of economic recovery, even as the region battles with its third wave of Covid and attempts to ramp up its vaccine programme. News that Germany plans to have 20% of its population vaccinated by...

Eurozone Sentix investor confidence rose to 13.1, expectations building on accelerated vaccination

Eurozone Sentix Investor Confidence rose to 13.1 in April, up from 5, well above expectation of 6.7. That's also the highest level since August 2018. Current situation index rose from -19.3 to -6.5, highest since February 2020. Expectations index rose from 32.5 to 34.8, an all-time high. Sentix said: "Investors...

Sunset Market Commentary

Markets The OPEC+ meeting features high on today’s agenda. Saudi Energy Minister Bin Salman said in the run-up to the meeting that OPEC’s cautious approach in March has been proven right. The cartel kept mutual and individual (Saudi Arabia) output curbs in place because of the uncertain path of the...

German Retail Sales, PMIs Eyed

The euro has recorded slight gains in the Wednesday session. Currently, the pair is trading at 1.1743, up 0.25% on the day. Will German Retail Sales lift euro? It has been a tough 2021 for the euro, which started the year above the 1.22 level but has since faltered, falling 2.6%...

New Problems With Vaccinations In Europe Have Stopped The Growth Of The Stock Market And Put Pressure On The Euro

On Tuesday, Chancellor Angela Merkel said that Germany will stop using the AstraZeneca Covid-19 vaccine for people under 60 starting from Wednesday, after the appearance of several new cases of blood clots. There was a policy change after the publication of new data on potential side effects approved by...

Biden’s Infrastructure Plan Will Be Scrutinized, Especially With Respect To Its Funding

Markets It was again business as usual on markets yesterday. The Suez Canal and Archegos sagas made way for the global reflationary story, which was supported by the data as well. EC economic confidence in the euro zone surprised to the upside (101 vs. 96 expected) as did the US...

Sunset Market Commentary

Markets With the dust on the potential fall-out of the Archegos saga settling and the Suez Canal reopening, global markets could leave these side-stories behind and return to ‘business as usual’. The latter these days still means assessing the progress of the vaccinations and the impact of upcoming (US) fiscal...

US Yields Resume Climbing

Market movers today German inflation is released, giving early signs of tomorrow's euro area inflation print. Overnight, the official Chinese PMI manufacuting and service PMIs for March are released. We expect an increase - mainly as a temporary correction after a big drop in the past three months. Metal...

Sunset Market Commentary

Markets In the absence of eco data, non-economic events were the main focus for trading today. Equity investors pondered potential further contagion from forced block selling of positions in Chinese tech shares and some US media firms that were linked to position squaring of the Archegos capital fund. For now,...

DAX Outlook: Consolidating Under New Record High, Overbought Daily Techs May Further Slow Bulls

The Dax is consolidating under new record high (14864) on Monday, after strong advance in past two days. Last Thursday’s bullish candle with long tail signaled downside rejection and an end of shallow pullback, while further acceleration on Friday confirmed strong bids. The export-heavy index was boosted by continuous improvement in...

Ifo: Eurozone economy to contract slightly by -0.4% in Q1, then recovers from Q2 onwards

Germany's Ifo institute said short term perspectives for Eurozone economy are "highly uncertain". On the one hand, "the start of the vaccination campaigns gives some reason for optimism". But on the other hand, "from the beginning of March onwards the pandemic situation has started to worsen almost everywhere with...