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Monday Closing Reports 16 Apr 2018

European cash equity markets are mostly lower at the closing bell (FTSE -0.8%, DAX -0.4%, CAC -0.1%). US cash equity markets are broadly higher at the closing bell (DJIA +0.9%, S&P +0.8%, NASDAQ +0.7%).
(Reports by Sigma Squawk)

European Closing Report
We saw a positive open on Wall Street however as the US airstrikes carried out in Syria over the weekend were viewed as less aggressive that many had expected. Geopolitics remain in focus with the White House warning that they are considering further Russian sanctions. Trump also took aim at Russia and China in a tweet over their currency devaluations.

In fixed, core EU bonds and Treasuries are both offside although have moved off their worst level since the US 13:30 BST macro releases – headline retail sales beat at +0.6% MoM (f/c. +0.4%) while the control group rose +0.4% (f/c. +0.4%) and Empire manufacturing rose to 15.8 from 22.5. The Dollar Index is lower for the day having lost ground against almost all of its G10 rivals while Sterling is at the top of the pile.

At the Fed, New York President Dudley said three-to-four rate increases this year seems reasonable, adding that more than four is unlikely. Dallas President Kaplan meanwhile warned that he sees growth of less than two-percent in 2020 as fiscal stimulus fades and monetary policy tightened. Still to come today, possible comments from Atlanta Fed President Bostic at 18:15 BST and TIC flow data at 21:00 BST.

Key Headlines/Data:

* Corporate News:
– Shire (-0.8%): Takeda are said to be preparing a £35 Bln bid
– Bank of America (-0.8%): Q1 EPS $0.62 versus $0.59 expected | Q1 Revenue $23.1 Bln versus $2.3.1 Bln expected

* German Wholesale Price Index (Mar):
– Wholesale Price Index M/M 0.0%, previous -0.3%
– Wholesale Price Index Y/Y +1.2%, previous +1.2%

* OPEC Secretary General Barkindo said the June meeting with provide a chance to review the agreement but added that the deal will continue until the end of the year.

* Swiss PPI (Mar):
– PPI M/M -0.2% versus +0.4% expected, previous +0.3%
– PPI Y/Y +2.0% versus +2.6% expected, previous +2.3%

* BoJ Deputy Governor Wakatabe noted that inflation has yet to reach their target but is on an upward trend. He added that by patiently maintaining current policy, they can heighten inflation expectations.

* Minneapolis Fed President Kashkari said fiscal stimulus supports the Fed’s plan for raising rates, adding that it now seems much more likely that inflation will reach two-percent.

* US Retail Sales (Mar):
– Retail Sales M/M +0.6% versus +0.4% expected, previous -0.1%
– Ex. Auto & Gas +0.3% versus +0.4% expected, previous +0.3%
– Control Group +0.4% versus +0.4% expected, previous +0.1%

* US Empire Manufacturing (Apr) 15.8, previous 22.5

* @realDonaldTrump – Russia and China are playing the Currency Devaluation game as the U.S. keeps raising interest rates. Not acceptable!

* US Business Inventories M/M (Feb) +0.6% versus +0.6% expected, previous +0.6%

* US NAHB Housing Market Index (Apr) 69 versus 70 expected, previous 70

* Dallas Fed President Kaplan said he sees cyclical wage pressures building this year. He did warn that he sees growth of less than two-percent in 2020 as fiscal stimulus fades and monetary policy tightened.


 






 







 
 
 
 
 
 
 
 
 
 
 
 * New York Fed President Dudley says three-to-four rate increases this year seems reasonable, adding that more than four is unlikely. 

* Bloomberg News White House correspondent (@spettypi) – White House considering more sanctions on Russia — From Sarah Sanders: “We are considering additional sanctions on Russia and a decision will be made in the near future.

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US Closing Report

Both the S&P 500 and DJIA hit their best levels in almost four-weeks while the latter moved above its 50-day moving average for the first time since March. Investors had been concerned about the US approach to Syria but risk sentiment has improved as the airstrikes conducted over the weekend were less aggressive than many expected. 

Staying with geopolitics, the Washington Post have reported that Trump has put the brakes on new Russian sanctions. In fixed, Treasuries are little changed on the day having pared earlier losses while the Dollar Index is in the red. Fed speakers were in abundance this afternoon although remarks were fairly routine. Dallas Fed President Kaplan repeated his view for three rate increases this year and more next while Bostic said they have not seen much movement in wages, and Kashkari said there are no signs of a sudden acceleration in inflation. 

Elsewhere, ECB Chief Economist Praet said an ample degree of stimulus remains necessary. He added that their measures are bearing fruit and the growth outlook confirms their confidence, and called for patience, persistence and prudence with their policy. US crude oil futures settled at $66.22 (-$1.17)

Key Headlines/Data:


               

* Atlanta Fed GDPNow (Q1) revised lower to +1.9% from +2.0%

* WTO filing shows the EU are seeking compensation from the US for the steel and aluminium tariffs.

* White House spokesman Sanders said they We are considering additional sanctions on Russia and a decision will be made in the near future

* Trump puts the brakes on new Russian sanctions, reversing Haley’s announcement (WASHINGTON POST):
– President Trump on Monday put the brakes on a preliminary plan to impose additional economic sanctions on Russia, walking back a Sunday announcement by U.S. Ambassador to the United Nations Nikki Haley that the Kremlin had swiftly denounced as “international economic raiding.

* White House spokesman said Trump is still willing to meet with Putin but noting is imminent.

* Amazon has shelved a plan to sell drugs to hospitals, and insiders say there are two reasons why (CNBC):
– Amazon Business, which sells bulk items to business customers, has shelved its plan to sell and distribute pharmaceutical products after considering it last year, according to people familiar with the matter

* Minneapolis Fed President Kashkari said there are no signs of a sudden acceleration in inflation while wages are growing slowly, suggesting there is slack.

* Atlanta Fed President Bostic said they have not seen much movement in wages.

* Dallas Fed President Kaplan repeats his view for three rate increases this year and more next.

* Trump has nominated are Richard Clarida for the Fed Vice Chair role and Michelle Bowman for a governor spot.

* ECB Chief Economist Praet said an ample degree of stimulus remains necessary. He added that their measures are bearing fruit and the growth outlook confirms their confidence, and called for patience, persistence and prudence with their policy.

* US crude oil futures settled at $66.22 (-$1.17) | Brent crude futures settled at $71.42 (-$1.16).





 















































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