Aloha! May goes on and it turns out that this time it’s not a “sell in May and go away” scenario, as some feared at the start of the month. Most major markets keep holding up after massive April gains and consolidate within relatively narrow ranges digesting the progress of reopening the global economy and incoming macro data (which are mostly extremely bad, but not always below expectations) as well as the politcal front, which seems to possibly be the major driver going forward as US elections campaigns speed up.
Last week
Equity markets stories:
-> Major move of the week was actually done in one day on Monday, when equity indices ripped over 3% higher on hopes spurred by positive news from the Covid-19 front. US pharma company Moderna announced positive results of its coronavirus vaccine tests, buoying expectations for a quick solution at hand in figthing the disease.
-> For the rest of the week sentiment was much more mixes and the markets wobbled around within relatively narrow ranges.
-> Effective weekly index changes: S&P500 +3,2%, Nasdaq +3,4%, EuroStoxx600 +3,6%, DAX+5,8%, Nikkei225 +1,8%.
Other markets events:
-> Bonds: US yield curve (10y-FF) still stable around 60bps, German curve (10Y Bunds-3M) also keeps a positive slope, Peripferial EU yields narrowed a bit with improved market sentiment.
-> Commodities (ex oil): Gold consolidated around $1700-1750 effectively -1.1% on week, Copper +2,6% on week.
-> Oil: continued higher ending +12% on week as global demand rebuilds.
-> Currencies: USD saw some weakness this week as improved sentiment buoyed pricing of riskier assets and CCYs not considered safe havens. EURUSD +0,7%, DXY (Dollar Index) -0,6% on week.
Major macro events:
Tuesday:
JP: Industrial Production MoM Final MAR inline (@ -3,7%, exp: -3.7%)
EA: ZEW Economic Sentiment Index MAY better than expected (@ 45, exp: 29) (for Germany: 51/32 respectively)
Wednesday:
EA: Inflation Rate YoY Final APR slight below expectations (@ 0,3%, exp: 0.4%)
EA: Consumer Confidence Flash MAY slightly better (@ -18,8, exp: -23.4-26)
Thursday:
US: MAY Markit PMIs above expectations: Services 36,9 vs. 30 exp., Manufacturing 39,8 vs. 38 exp, Composite 36,4.
EA: MAY Markit PMIs above expectations: Services 28,7 vs. 25 exp., Manufacturing 39,5 vs. 38 exp, Composite 30,5 vs. 25 exp.
Next Week’s major macro events:
Monday:
GE: Ifo Business Climate (exp. 78,3)
Tuesday:
GE: GfK Consumer Confidence JUN (exp. -18,6)
US: New Home Sales APR (exp. -15,4% MoM)
US: Fed Kashkari speech
Wednesday:
EA: ECB President Lagarde speech
US: Fed Bullard speech
US: Beige Book
Thrusday:
EA: Business Confidence MAY (f’cast. -3)
US: Durable Goods Orders APR (exp. -18,1% MoM)
US: GDP Growth Rate QoQ 2nd Est Q1 (exp. -5%)
US: Weekly Jobless Claims (exp. Continuing 25073k, Initial 2438k)
US: Fed Williams speech
Friday:
JP: Consumer Confidence MAY (f’cast 25,1)
FR: GDP Growth Rate YoY final Q1 (exp. -5,8%)
IT: GDP Growth Rate YoY final Q1 (exp. -4,8%)
US: Personal Spending MoM Apr (exp. -12%)
US: Personal Income MoM APR (exp. -6%)
all details here: https://tradingeconomics.com/calendar
Best of luck!
PC
Disclaimers: None of the ideas, views and thoughts presented here shall ever be taken as a recommendation to buy or sell stocks,bonds,FX,commodities or any other financial instruments as stated in REGULATION (EU) No 596/2014 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC or the Regulation of the Polish Minister of Finance of 19 October 2005 on information constituting recommendations regarding financial instruments, their issuers or exhibitors (Journal of Laws of 2005, No. 206, item 1715) or the Polish Act of 10 February 2017 amending the act on trading in financial instruments and some other acts. The article is for educational reasons and purely presents private views of the author, thus the author shall not be claimed eligibile for any losses of a third party resulting from trading activities based upon this article. The author uses his best knowledge and data from sources believed to be reliable, but makes no representations as to the accuracy of the data. Full Disclaimers&Liability Limitations page.
