Market Watch: European markets were flat on the day, with Food & Beverage and Chemicals the only notable positive moves, offset by weakness in Tech, Energy and Travel & Leisure. The latter two sectors are down almost 3% this week. After a couple of weak days, the US showed good recovery: S&P up 82bps, led by Food, Banks and Telcos. Autos and Consumers the laggards. Post BOE meeting, UK 10Yr trades a bit tighter, back below 0.8%.
US: Initial jobless claims fell more than expected, to 498k, the lowest post-pandemic level seen.
Eurozone retail sales surprised to the upside, rising +2.7% MoM for March beating consensus of +1.6%. Germany contributed highly, rising +7.7% MoM.
UK: As expected the BOE did not alter the policy rate or asset purchase programme, but there was a sense of tone that asset purchase rate may slow, and signal rate could be hiked in 2023. Forecasts have been raised for 2021: with GDP moving from 5% to 7.25% and unemployment from 6.5% to 5.0%. We also had the final services PMI, which showed levels of 61.0 well above the flash estimate of 60.1. Composite was 60.7, as all sub-indices rose except for business expectations and prices charged.
China: Exports continue to rise steeply, with a pace of +32.3% YoY in April, higher than consensus of 24.1%. Imports in-line at 43.1%, with trade surplus rising by $29.1b to $42.85b. Caixin’s services PMI rose by 2p to 56.3 in April, higher than the cons of 54.2.
News In Brief:
Norges Bank kept its signal rate unchanged and gave no new indication. Rate hike is still expected in H2 of this year.
US to keep pressure on China and preserve some of Trump’s limits on US investments in some Chinese companies.
Jersey has become a flashpoint in the argument over Channel fishing rights, as French fishermen protest licenses given by the UK.
Earnings: Credit Agricole performed well of trading, Siemens raised FY guidance, and BMW EBIT beat
Today’s Data: US Non-Farm Payrolls which are expected to show a rise of close to 1m jobs in April (916k in March). Unemployment is expected to show a further tick down, from 6.0% to 5.8%. German industrial production is expected to have risen 2.2% MoM in March after February’s 1.6% fall.
- US S&P recovers after few weak days, led by Food, Banks and Telcos. NFP the major datapoint for today.
- BOE - as expected - didn't make any huge changes, but trajectory for tapering and hikes looks clearer.
- Jersey a flashpoint as the row over fishing between UK and France hits a new peak.
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