EUROPEAN EQUITY OPEN: Stocks open without any firm direction
OVERNIGHT: On Wall Street, although stocks were ultimately little change within a tight range, trade was choppy, with mixed reception to the Fed's Senior Loan Officer Opinion Survey. The Fed's Senior Loan Officer Opinion Survey showed credit conditions for US businesses and households tightened in the first few months of 2023, as Chair Powell alluded to in his post-meeting press conference last week. However, the results indicated that a gradual effect of the Fed's monetary tightening rather than a sharp drop in credit following the March collapse of Silicon Valley Bank. Financials outperformed although regional banks saw further selling, albeit modest. Consumer Staples tumbled on Tyson (TSN) earnings and cut guidance. Treasuries extended the post-NFP sell-off, amid heavy corporate supply and this week's refunding auctions. Our US wrap is here. Stocks in the Asia-Pacific region were mixed; Aussie shares were pressured after Australia's largest bank CBA reported a slight increase in Q3 cash profits, but said many customers were struggling with higher interest rates and living costs. Japan's Nikkei 225 outperformed, reclaiming 29,000 status. In China, trade figures were mixed, with stronger-than-expected export growth vs a surprise contraction in imports (see below). Our Asia wrap is here.
RECAP - CHINA TRADE: The Trade Balance widened to USD 90.21bln in April (exp. 71.6bln, prev. 88.19bln). Capital Economics notes that export growth slowed in April, reversing almost all of the increase in March, indicating weak global demand. Import volumes unexpectedly dropped to their lowest levels in 12 months, but CapEco said a rebound was expected due to the reopening of the economy driving domestic demand. Still, it thinks that China's trade surplus is likely to decline, and a recession is expected in most developed economies later this year. ING notes that crude oil imports in April fell to an average of 10.36mln BPD (vs prev. 12.37mln, and 10.52mln Y/Y), which it attributes to lower operating rates due to maintenance.
EUROPEAN OPEN: European equities open around flat following lacklustre leads from Wall Street and APAC trade. In the UK, data from Halifax showed house prices falling -0.3% M/M in April (prev. 0.8%). Halifax said that the UK housing market was showing signs of stabilisation, with mortgage rates stabilising and an increase in the number of properties for sale. But concerns over the cost of living may continue to weigh on sentiment and activity, and combined with higher interest rates, may put further downward pressure on house prices over the course of the year. In stock specifics, Credit Suisse (CSGN SW) CEO Ulrich Koerner will join the UBS (UBSG SW) executive board of the combined bank once the combination is finalised. Daimler Truck (DTG GY) is optimistic about the outlook as demand and supply chains improve. Ryanair (RYA ID) is reportedly close to placing a significant "multi-billion-Dollar" new 737 MAX aircraft order with Boeing (BA). Payment names will note PayPal (PYPL) slipped afterhours following its results. Our full equity specific briefings can be accessed here and here.
DAY AHEAD:
- Our interactive Day Ahead calendar is here; a pdf version can be accessed here.
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EUROPEAN DATA/SPEAKERS: It is a quiet day for European data releases, with only the Riksbank meeting minutes. Traders will be closely watching the release for further insight into the thought process of dissenters Breman and Floden after the central bank's the dovish 50bps hike in April, and how close other members were to voting for 25bps; Floden will also be speaking later today. Elsewhere, ECB’s chief economist Lane will deliver remarks again, but no text is due. -
US DATA/SPEAKERS: The US day sees the release of the NFIB small business optimism survey, the weekly RedBook data and the IBD/TIPP sentiment index. On the speaker's docket, Fed's Jefferson (Voter, Neutral) participates in virtual conversation, and Fed's Williams (Voter, Neutral) will speak at the NY Economic Club. -
ENERGY: The API will report weekly inventory stats after the US close; this week, analysts expect headline crude stocks to draw 1.6mln, distillates are seen drawing 0.8mln, whilse gasoline stocks are expected to draw by 1.3mln. -
US CORPORATE EARNINGS: The highlights on today earnings slate includes APD, DUK, ABNB, OXY; our Daily US Earnings Estimates note can be accessed here. Meanwhile, for the week ahead, DIS on Wednesday; JD on Thursday; our Weekly US Earnings Estimates sheet can be accessed here.
09 May 2023 - 08:10- Fixed IncomeData- Source: Newsquawk
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