Wednesday has ended with most products ending essentially unchanged after a choppy but volatile session, with the exception being oil, where WTI has fallen by 3% due to a shock US inventory build of 4.7 million barrels last week, versus expectations for a decline of nearly 600,000 barrels.
Elsewhere it was generally fairly calm, with the FOMC Minutes unable to inspire any real inspiration, given that the Fed are happy to be patient and to hold rates as they are for the foreseeable future. Expectations from the Fed were that the ongoing soft patch in inflation will prove temporary, while acknowledging that there may be a need to act if price pressures continued to defy expectations by holding at lower levels. The US/China trade war had little effect, although the ongoing concerns about protectionism continue to underpin the Jpy, Chf and US Treasuries – which saw the 10Y yield fall below 2.4% on Wednesday – while stocks were around 0.5% lower.
Sterling remains weak and looks set to remain under pressure following a UK cabinet resignation, adding to the Brexit confusion and possibly forcing the hand of the UK PM, May, to resign. The UK Times headline is that she will resign on Friday. Today sees the EU elections, which would normally be ignored although the interest will lie in what gains may be made by the UK Brexit Party.
Thursday will focus on the global PMIs and the German IFO Business Climate/Expectations although it is otherwise going to be an empty session, re data. Asia has pretty much an empty calendar, and aside from the PMIs, so does Europe although, as mentioned above, the EU elections will be going on and the results will be coming in from early Friday in Asian time. It looks as though the major parties will be decimated right across the spectrum, given the bitterness of the EU electorate towards the current set of bureaucrats, and that the minor, popular parties will be the beneficiaries. Watch the Brexit party go! The US will have the April New Home Sales (exp -2.8%mm), the Kansas Fed Mfg Activity and the Jobless Claims. Have a good day.
Economic data highlights will include:
Thur: Japan Flash May Nikkei Mfg PMI, German Q1 GDP, EU Flash Manufacturing/Services/Composite PMIs, German IFO Business Climate/Expectations, US Flash PMIs, Jobless Claims, New Home Sales, Kansas Fed Mfg Activity,
Market moves, in brief:
FX: DXY 98.10 (+0.08%)
Bonds: US10Y; 2.382% (-1.86%), German 10Y; -0.085% (-35%), UK 10Y; 1.017% (-6.23%), Australian 10Y; 1.646% (+0.10%), NZ 10Y; 1.795% (-0.55 %), China 10Y; 3.303% (-0.21%)
Stock Indices: DJI; -0.39%, S+P; -0.28%, NASDAQ; -0.45%, EUStoxx50; +0.01%, FTSE100; +0.07%, Shanghai Composite; -0.49%,
Metals: Gold $1274 oz (0.00%), Silver $14.45 oz (-0.03%), Copper $2.6765 lb (-1.38%), Iron Ore $97.04 per tonne (NYMEX) (+0.50%),
Oil: WTI $ 61.31 pb (-2.61%)
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