The US$ is mildly lower, while stocks have been volatile on Thursday, with the US indices opening sharply lower, down around 1%, before partially recovering as the session wore on after Donald Trump said that reaching a deal this week is still possible. In the meantime, traders wait on the outcome of the talks between the US/ China, with Vice Premier Liu He currently in Washington in a last-ditch effort to strike a deal. Otherwise, the US will raise tariffs to 25% from 10% on $200 billion worth of Chinese imports later in the coming session. Apparently the talks are currently underway, so we might expect some kind of result/headline later in the session – beware of a potential sharp move one way or the other.
Elsewhere, markets were choppy but without too much direction, with the metals doing little and WTI ending in the middle of its 61.00/62.20 range, while US yields remain heavy as traders remain wary of increased trade tensions, potentially slowing global demand.
In terms of data, the US initial jobless claims dropped -2k to 228k in the week ending May 4, above expectation of 220k, while the continuing claims rose 13k to 1.684M in the week ending April 27. The US PPI came in, in line with expectations, at 0.2% mm, 2.2% yy in April.
Looking ahead, Friday will kick off with the NZ Electronic Card Retail Sales (exp +0.8%mm, 1.9%yy – April), the Australian RBA Statement on Monetary Policy and the China New Loans for April. Europe will follow up with the German Trade Balance for March (exp € 18.2 bio) and the Current Account, while the UK will look to the Q1 GDP (exp 0.0%qq, 1.8%yy) and the Manufacturing/Industrial Production (exp +0.2%mm/+0.1%mm) for guidance. The main event of the day will be the US CPI (CPI, exp +0.4%mm, +2.1%yy; Ex F/E, exp +0.2%mm, 2.1%yy), while CB speakers will include Lautenschlager and Coeure (both ECB) and Brainard and Bostic (Fed). Have a good weekend.
Economic data highlights will include:
Fri: NZ Electronic Card Retail Sales, Japan Trade Balance, Australian Home Loans/Investment Lending for Homes, RBA Statement on Monetary Policy, China New Loans, German Trade Balance, UK Q1 Preliminary GDP, Manufacturing/Industrial Production, Trade Balance/Goods Trade Balance, US CPI, Speeches; Lautenschlager/Coeure (both ECB) and Brainard/Bostic (Fed).
Market moves, in brief:
Bonds: US10Y; 2.449% (-1.61%), German 10Y; -0.047% (-6-1%), UK 10Y; 1.124% (-1.14%), Australian 10Y; 1.726% (-1.07%), NZ 10Y; 1.835% (-1.61 %), China 10Y; 3.300% (-1.35%)
Stock Indices: DJI; -0.54%, S+P; -0.30%, NASDAQ; -0.41%, EUStoxx50; -1.95%, FTSE100; -0.87%, Shanghai Composite; -1.48%,
Metals: Gold $1284 oz (+0.22%), Silver $14.75 oz (-0.52%), Copper $2.766 lb (-0.16%), Iron Ore $94.24 per tonne (NYMEX) (+0.05%),
Oil: WTI $61.58 pb (-0.63%)
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