European Closing Report(by Sigma Squawk)
Wall Street has also ripped higher in the opening exchanges as investors welcomed signs of thawing tensions between the US and China amid their trade dispute.
Chinese President Xi Jinping promised overnight to cut Chinese tariffs on car imports while US Trade adviser Navarro said this afternoon that the doors are open for trade talks. In currency space, the Dollar Index is in the red although losses will have been limited by higher-than-expected US PPI data.
The Euro spiked higher after hawkish remarks from the ECB’s Nowotny but pulled back as an ECB spokesman distanced the Governing Council from his comments. The Japanese Yen is the under-performer meanwhile amid the broadly positive risk sentiment.
Elsewhere on the data front, both French and Italian industrial production came in below expectations. Canadian housing starts were stronger-than-expected but building permits missed.
We did also hear from Dallas Fed President Kalan who reiterated his view for another two rate increases this year, adding that it is too soon to judge the impact of trade tensions and tariffs on the economy.
In commodity space, oil prices have gained with Brent crude futures back above $70/barrel. Still to come today, the US Treasury are to sell $30.0 Bln of 3-year notes.
* Dallas Fed President Kalan reiterated his view for another two rate increases this year, adding that it is too soon to judge the impact of trade tensions and tariffs on the economy.
* French Industrial Production M/M (Feb) +1.2% versus +1.5% expected, previous -2.0% revised to -1.8%
* Italian Industrial Production M/M (Feb) -0.5% versus +1.0% expected, previous -1.9% revised to -1.8%
* Bank of England’s McCafferty said the MPC should not dally when it comes to tightening policy modestly.
* US NFIB Small Business Optimism (Mar) 104.7 versus 107.0 expected, previous 107.6
* ECB’s Nowotny said he thinks it is now time for a gradual normalization of monetary policy. He later suggested that the deposit rate could be lifted 20 basis points to -0.2% to start the process of rate increases.
* An ECB spokesman later said Nowotny’s views are his own and do not represent the view of the Governing Council.
* Canadian Housing Starts (Mar) 225.2K versus 219.0K expected, previous 229.7K revised to 231.0K
* Canadian Building Permits M/M (Feb) -2.6% versus -1.5% expected, previous +5.6% revised to +5.2%
* US Producer Price Data (Mar):
– PPI M/M +0.3% versus +0.1% expected, previous +0.2%
– PPI Y/Y +3.0% versus +2.9% expected, previous +2.8%
– PPI Ex. Food & Energy M/M +0.3% versus +0.2% expected, previous +0.2%
– PPI Ex. Food & Energy Y/Y +2.7% versus +2.6% expected, previous +2.5%
* According to the Business Journal, China are considering cutting import duties on cars by half.
* EU Brexit Minister Barnier said the UK wants an orderly exit from the EU and UK PM May has brought more clarity to the Brexit talks.
* US Wholesale Inventories M/M (Feb F) +1.0% versus +0.9% expected, previous +1.1%
– Trade Sales M/M +1.0% versus +0.4% expected, previous -1.1% revised to -1.5%
* Trump’s homeland security advisor Bossert is resigning – White House.
* White House Trade Adviser Navarro said the doors are open for trade talks with China.
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