Sunset Market Commentary
Markets
Markets enjoyed an outright risk-on session as US citizens are heading to vote for a new president and part of Congress. Last week, market uncertainty on the potential impact of the second corona wave and on the outcome of the US presidential election were enough a reason for investors...
ECB Visco: Monetary policy must remain expansive for a long time
ECB Governor Council member Ignazio Visco told Il Corriere della Sera newspaper, "price changes tend to be very low, if not negative, and a gap has been created with our goal of price stability, with effects that can be dangerous". Because of this, monetary policy "monetary policy must be...
Trade surplus in Germany and Italy widened, EUR/CAD mildly higher
Germany exports dropped -9.4% yoy to EUR 96.1B in June. Imports dropped -10.0% yoy to EUR 80.5B. Trade surplus came in at EUR 15.6B. In calendar and seasonally adjusted terms, trade surplus widened to EUR 14.5B, up from EUR 7.6B, above expectation of EUR 10.3B. Industrial production rose 8.9%...
Yen Staying Firm But Risk Markets Refuse to Give Up
The financial markets are still refusing to commit to a direction. Major European stocks are generally higher despite broad selloff in Asia. US futures point to lower open while 10-year yield is doing its best to hold on to 0.6% handle. Swiss Franc is currently the worst performing one...
Italy industrial output rose 42.1% mom in May, well above expectations
Italy industrial output rose 42.1% mom in May, well above expectation of 19.2%. That's also much more than enough to reverse April's -20.5% mom decline. Nevertheless, for the last three months over the previous three months, productions still dropped -29.9%. Comparing with May 2019, productions dropped -20.3% yoy.
Full release...
Sunset Market Commentary
Markets
Markets started the week in outright risk-off modus. Headlines of a jump in new Covid 19 cases from Beijing, over Tokyo and Germany to multiple states in the US, spooked markets this morning. The risk of a second wave of the coronavirus evidently questions investors’ hope on ‘V-shaped-like’ recovery....
Sunset Market Commentary
Markets
Markets took a guarded but overall still constructive start to the new trading week. European equities opened slightly lower after Friday’s stellar gain. However, equities are still captured in a buy-on-dips pattern and quite easily reversed the initial loss. There were no important data in the US today and...
Sunset Market Commentary
Markets
Markets shifted to a reluctant risk-off mode awaiting a speech of US President Trump. Later today, the US president is expected to announce US action against China, a response to the country imposing a new security law and strengthening its grip on Hong Kong. European equities are mostly losing...
Sunset Market Commentary
Markets
Investors kicked of the week on cautious footing. Today’s eco calendar was empty, resulting into technical and sentiment based trading. Overall risk appetite is poor. In some European countries a new phase of lockdown easing kicked in today. However, the prospect of the economy gradually returning to normal was...
Week ahead – Stimulus Trade Losing Momentum?
It’s sometimes easy to forget just how unusual these markets are that we’re witnessing on a daily basis. They’re contending with economies around the world that only two months ago were in the best shape they’ve been in for years, a global pandemic that’s wreaked havoc across the globe,...
Italy Is Downgraded
Italy was downgraded following the significant impact of the global Covid-19 pandemic
Rating agency Fitch has downgraded Italy's rating to "BBB-" from "BBB+" with a stable outlook, saying "the downgrade reflects the significant impact of the global Covid-19 pandemic on Italy's economy and the sovereign's fiscal position." This decision puts...
Aussie Extends Rally on Strong CPI, Weak Dollar Awaits Fed and GDP
Australian Dollar remains the strongest one for the week as stronger than expected CPI data prompted another round of buying in Asia. Other commodity currencies are also firm, but the Japanese Yen is not too far away. Dollar, on the other hand, is the worst performing one for the...
Fitch downgrades Italy rating to BBB-, significant impact of coronavirus on economy and fiscal position
Fitch downgraded Italy's credit rating to BBB- yesterday, down from BBB, with a stable outlook. The rating is now just a single notch above "junk level". The agency said "the downgrade reflects the significant impact of the global Covid-19 pandemic on Italy's economy and the sovereign's fiscal position.... According...
Week Ahead – Georgia Reopening Fallout, Three Big Rate Decisions, and Big Tech Earnings
Global equities and the US dollar appear to be approaching a possible turning point with the stimulus trade. Global equities have been widely supported by unprecedented stimulus from central banks and governments, but that seems to be losing some of its firepower, while the steady demand for US Treasuries...
Weekly Focus – The Fragile Crawl Back Begins
After a long period of bad news on the coronavirus front, we have finally seen more positive developments lately. This is broadly in line with the view we put out in late March in Research COVID-19: Closer to the peak of bad news , 25 March 2020. All...
Sunset Market Commentary
Markets
Asian trading settings set the tone for dull European dealings as well. The Gilead progress in a clinical trial to battle the coronavirus and the US administration’s phased guidelines to exit the lockdown outweighed the historic Chinese GDP setback and awful retail/investment/production data. European stock markets rallied around 3%...
Italian Debt Worries Return
Market movers today
Another weekly reading of US initial jobless claims is due in the afternoon. 16.8 million Americans already filed for unemployment benefits in the previous three weeks and there is no reason to believe numbers stopped surging last week. At the same time, the Philly Fed index is...
Sunset Market Commentary
Markets
Risk aversion returned to markets following yesterday’s surge in especially US stock markets. Today’s countermove started right at the onset of European dealings and had several roots. A high-profile tech company published as one of Europe’s first awful Q1 earnings and refrained from guidance. It acted as a chill...
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...
Muted Reactions to Jobless Claims, Dollar Picking Up Some Buying, Euro Weak
It seems that the markets are not having a clue on what to do next. While US initial jobless claims doubled to 6.6m, reactions are rather muted. DOW futures are staying positive for now, while European indices are mixed. Dollar seems to be picking up some buying after the...
EU Gentiloni: Italy losing 3% GDP for each month of lockdown
EU's Commissioner for Economy Paolo Gentiloni warned that each month of lockdown in Italy would cause a -3% annualized GDP decline. But for now, there is no discussion on an Italian bailout. Confirmed coronavirus cases in Italy surged pass 110k this week while death tolls broke 13k. There is...
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...
Dollar and Yen Back in Driving Seat as Risk Aversion is Coming Back
Dollar and Yen are trading as the stronger ones today as risk aversion seems to be coming back as another quarter starts. Commodity currencies are thew weakest ones as led by Canadian Dollar for now. Private job data from the US were not as bad as expected. But just...
Italy Gualtieri: 6% GDP contraction realistic, but there will be vigorous rebound
Italy's Economy Minister Roberto Gualtieri said the forecasts of -6% GDP contraction this year are "realistic". Though, he insisted the economy can "aim at a vigorous rebound" after the coronavirus pandemic.
Meanwhile, he said a new stimulus package is set to be approved this month. That would be "significantly larger"...
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...
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 in Profit Taking Retreat, Yen and Dollar Recovering Grounds
European stocks and US futures turn softer today, apparently on pre-weekend profit taking again. FTSE is additionally pressured, possibly as Prime Minister Boris Johnson was tested positive for coronavirus. In the currency markets, Yen regains some ground together with Swiss Franc and Dollar. Commodity currencies are mildly lower. However,...
Italy: We’re haven’t reached peak of coronavirus yet
Italy's chief of the Superior Health Institute Silvio Brusaferro warned that "we haven't reached the peak and we haven't passed" the coronavirus pandemic. Nevertheless, there were signs of slow down in new infections, and the peak may not be far away. He added, "when the descent begins, how steep...
US Coronavirus Infections and Stocks Surge, Dollar Weakens
Dollar is set to end the week as the week as the worst performing as corrections in the financial markets extend. Asian indices are generally higher following another day of strong close in the US overnight. Yen follows Dollar as the second weakest naturally as risk aversion eased. Meanwhile,...
EU divided on using coronabonds to fight the pandemic crisis
EU leaders failed to agree on a coordinated coronavirus response yesterday after marathon debates. European Council President Charles Michel admitted after the meeting that "We had tonight a very strong political debate. It was a useful debate, it was a necessary debate.,"
The major division centered around the idea of...