US stocks have bounced, generally up by around 0.8%, while the dollar is firm at the end of Tuesday trade, as mixed signals continue to come from either side of the US/China trade talks, and it seems that this could continue until Donald Trump meets Chinese President Xi at the G20 meeting in late June. Trump today played down the crisis by Tweeting that the current standoff is “just a little squabble”! The Jpy and the Chf are both a little weaker as safe haven demand eased, although the commodity currencies were unable to take any advantage and are finishing the day on their lows. Sterling is very heavy due to the ongoing Brexit woes, while the Euro is also under some mild pressure, albeit within a tight range, not helped by the economic data showing that Eurozone industrial production contracted -0.3% in March and the German ZEW economic sentiment deteriorated to -2.1 in May. Also not helping the Euro was a statement from Italy’s deputy prime minister, who said that Italy is ready to break the EU budget rules on debt levels, if necessary, in order to bolster employment.
In other markets, WTI is up by 0.70%, although it came off its high late in the day after a surprise build of 1.3 mio barrels in the weekly inventory figures from the API, while the precious metals are slightly lower and Iron Ore is down by around 0.5%.
Looking ahead, Wednesday will kick off with a busy Asian session, which will include the Australian WBC Consumer Confidence, Wage Price Index (exp +0.6%qq, 2.4%yy), China Retail Sales (exp 8.6%yy), Industrial Production (exp 6.5%yy), Fixed Asset Investment (exp 6.4%yy), NBC Press Conference, Japan Housing Starts, Construction Orders, Machine Tool Orders. Europe will have the Preliminary Q1 German (exp 0.4%qq, 0.7%yy) and EU GDP (exp 0.4%qq, 1.2%yy) as well as the Q1 EU employment change (exp 0.3%qq), while the US will look to the April Retail Sales (exp +0.2%mm, Ex-Auto +0.7%mm), along with the Capacity Utilisation (exp 78.7%), Business Inventories (exp 0.00%), Industrial Production (exp 0.2%) and the New York State Empire Mfg Index (exp 8.5). Speakers will include the Fed’s Quarles and the ECB’s Praet and Coeure.
Economic data highlights will include:
Wed: Australian WBC Consumer Confidence, China Retail Sales, Industrial Production, Fixed Asset Investment, NBC Press Conference, Japan Housing Starts, Construction Orders, Machine Tool Orders, German/EU Q1 Preliminary GDP, Employment Change, US Retail Sales, Industrial Production, Capacity Utilisation, NAHB Housing Market Index, EIA Crude Oil Stocks Weekly Change,
Market moves, in brief:
FX: DXY 97.55 (+0.21%)
Bonds: US10Y; 2.415% (+0.46%), German 10Y; -0.07% (0.00%), UK 10Y; 1.100% (-0.10%), Australian 10Y; 1.712% (-1.05%), NZ 10Y; 1.790% (-0.83%), China 10Y; 3.301% (+0.79%)
Stock Indices: DJI; +0.82%, S+P; +0.80%, NASDAQ; +1.14%, EUStoxx50; +1.31%, FTSE100; +0.97%, Shanghai Composite; -0.70%,
Metals: Gold $1294 oz (-0.25%), Silver $14.79 oz (+0.18%), Copper $2.723 lb (+0.17%), Iron Ore $93.88 per tonne (NYMEX) (-0.53%),
Oil: WTI $ 61.33 pb (+0.70%)
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