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.
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:
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)
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)
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:
GE: Ifo Business Climate (exp. 78,3)
GE: GfK Consumer Confidence JUN (exp. -18,6)
US: New Home Sales APR (exp. -15,4% MoM)
US: Fed Kashkari speech
EA: ECB President Lagarde speech
US: Fed Bullard speech
US: Beige Book
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
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!
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