European Closing Report
Basic resources and auto stocks are leading declines while Credit Suisse and Kering have outperformed on earnings. We have seen a choppy open on Wall Street meanwhile with markets paring opening losses to trade little changed in recent trade.
Investors remain jittery as US yields continued to climb with the 10-year at a new multi-year high. European bonds appeared to have paused however and are little changed on the day with little macro data to dictate otherwise.
Comments from ECB speakers did garner some attention however with Mersch noting that confidence on inflation has risen recently, and Vasiliauskas adding that he’s confident it’s time to transition from QE.
In currency space, the US Dollar has gained against all of its G10 rivals the New Zealand Dollar and Norwegian Krone are the weakest, the latter losing ground amid reports that the Norwegian Parliament is seeking to reverse the decision to lower the Norges Bank inflation target.
Elsewhere, oil prices did drop after a surprise build in US crude stocks although losses were trimmed relatively quickly.
Still to come today, a $35.0 Bln 5-year note auction at 18:00 BST and possible comments from Bank of Canada Governor Poloz at 21:15 BST. Earnings after the Wall Street close include Ford, Visa, Facebook and AT&T.
* EU Ready to Give U.K. a Say on Trade in Customs Union (Bloomberg):
– The European Union would be prepared to offer Britain a better trade deal than the one it gave Turkey if it decides to stay in the customs union after Brexit, and would listen to U.K. views on trade policy, according to an EU official.
* German government lowered their growth forecast for this year to +2.3% from +2.4%, and sees 2019 at +2.1%.
* ECB Governing Council member Mersch said confidence on inflation has risen recently.
* ECB Governing Council member Vasiliauskas said he’s confident it’s time to transition from QE
* UK Brexit Minister Davis said the motion on the Brexit deal will be amenable but if parliament rejects if, negotiations will fall. He added that they do not need an agreement on Ireland until October. He also said a bare bones deal is more likely that no-deal.
* Spanish PPI Data (Mar):
– PPI M/M -0.9%, previous +0.1%
– PPI Y/Y +1.3%, previous +1.3% revised to +1.2%
* Swiss ZEW Survey – Expectations (Apr) 7.2, previous 16.7
* The Norwegian Parliament is seeking to reverse the decision to lower the Norges Bank inflation target.
* Huawei Under Criminal Investigation Over Iran Sanctions (WSJ):
– The Justice Department is investigating whether Huawei Technologies Co. violated U.S. sanctions related to Iran, according to people familiar with the matter—opening a new avenue of scrutiny amid wider national-security concerns over the Chinese cellular-electronics giant.
* @realDonaldTrump – Looking forward to my meeting with Tim Cook of Apple. We will be talking about many things, including how the U.S. has been treated unfairly for many years, by many countries, on trade.
* DoE Weekly Oil Inventories:
– Crude +2.17 Mln versus -1.60 Mln expected, previous -1.07 Mln
– Distillate -2.61 Mln versus -0.90 Mln expected, previous -3.11 Mln
– Gasoline +0.84 Mln versus -0.60 Mln expected, previous -2.97 Mln
US Closing Report
Boeing shares have led the Dow higher after they beat on first-quarter earnings and hiked their 2018 outlook. Investors are also keeping an eye on the Treasury market as US government bond yields continued to rise today – the 30-year yield rose to its highest level in two months.
The $35.0 Bln 5-year note sales was well received with the yield stopping through to 0.4 basis points to 2.837%. Elsewhere, oil prices were choppy after initially falling on the DoE inventory report before settling at $68.05 (+$0.35).
In currency space, the US Dollar has gained against all of its G10 rivals while the New Zealand Dollar and Norwegian Krone are the weakest.
Elsewhere, the UK House of Lords has voted against the government for the sixth time in a week, this time over controls on new so-called “Henry VIII powers” for ministers to pass laws without full parliamentary consent after EU withdrawal.
* US sold $17.0 Bln of 2-Year Floating Rate Notes:
– Bid to Cover: 3.65, previous 2.78
– Yield: 0.033%
* US sold $35.0 Bln of 5-Year Notes:
– Bid to Cover: 2.49, previous 2.50
– Indirect Bidders: 60.2%, previous 63.5%
– Direct Bidders: 13.7%, previous 8.3%
– Yield: 2.837% (WI: 2.841%)
* UK House of Lords has voted against the government for the sixth time in a week, this time over controls on new so-called “Henry VIII powers” for ministers to pass laws without full parliamentary consent after EU withdrawal.
* US crude futures settled at $68.05 (+$0.35) | Brent crude futures settled at $74.00 (+$0.14).
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