Markets wait for Walmart and Powell

EU Mid-Market Update: EU defense stocks trading higher amid no breakthrough yet in low-level Russia-Ukraine talks in Turkey; Markets wait for Walmart and Powell.

Notes/observations

- European indices and US futures are red, led by Nasdaq100 futures, following sixth straight daily gain, helped by big tech. US data is in focus, with PPI final demand, retail sales, Empire manufacturing and Philadelphia Fed business outlook all at 08:30 ET; Fed Chair Powell to speak at 9:40ET.

- UK Q1 GDP beats estimate at 1.3% v 1.2%e, driven by tariff front-running. The strong data tempers rate cut BOE expectations and gives upside tailwinds to sterling (GBP). More positive GDP readings also from Swiss, Norway and Poland.

- Crude oil drops nearly 4% after Iran reportedly ready to sign nuclear deal with US Pres Trump 'with conditions', despite IEA raising 2025 and 2026 demand and supply outlooks; Trump remains silent on any secondary sanctions on Russia after it sent low-level delegation for Ukraine talks in Turkey.

- Bitcoin down 1% to 2% to ~$102K as optimism over US-China tariff talks fades amid broader uncertainty.

- Asia closed mixed with Nifty50 outperforming +1.7%. EU indices -0.4% to +0.2%. US futures -0.4% to -0.8%. Gold -0.5%, DXY -0.3%; Commodity: Brent -3.7%, WTI -4.0%; Crypto: BTC -1.3%, ETH -1.9%.

Asia

- New Zealand Apr Food Prices M/M: 0.8% v 0.5% prior.

- Australia May Consumer Inflation Expectations: 4.1% v 4.2% prior.

- Australia Apr Employment Change: +89.0K v +20.0Ke; Unemployment Rate: 4.1% v 4.1%e.

Global conflict/tensions

- Russia President Putin would not meet with Ukraine President Zelensky in Istanbul to discuss ending the war in Ukraine.

Americas

- Fed’s Daly (non-voter for 2025) stated that monetary policy was well-positioned and moderately restrictive; Businesses were cautious amid uncertainty, but not stalling out.

- US expected to 'dial back' bank rules that were imposed during the 2008 global financial crisis; regulators are preparing to cut banks' capital requirements.

Energy

- Iran said to be ready to sign nuclear deal with US Pres Trump 'with conditions', including US sanctions relief.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 -0.16% at 543.00, FTSE -0.12% at 8,575.04, DAX -0.20% at 23,456.69, CAC-40 -0.20% at 7,820.83, IBEX-35 +0.05% at 13,828.69, FTSE MIB -0.49% at 40,160.00, SMI +0.20% at 12,130.30, S&P 500 Futures -0.61%].

Market focal points/key themes: European indices opened lower across the board, but moderated some of the losses as the session progressed; geopolitical concerns seen weighing on risk appetite; among sectors in the green are consumer discretionary and utilities; sectors inclined to the downside include energy and materials; Greencore to acquire Bakkavor; focus on US retail sales and industrial production figures coming out later in the day; earnings expected in the upcoming Americas session include Walmart, Alibaba, Applied Materials and Deere.

Equities

- Consumer discretionary: Watches of Switzerland [WOSG.UK] +3.0% (earnings).

- Financials: Allianz [ALV.DE] -2.5% (results).

- Industrials: Rheinmetall [RHM.DE] +6.0% (Ukraine-Russia talks in Turkey started; Putin not attending), Siemens [SIE.DE] -3.0% (earnings), ThyssenKrupp [TKA.DE] -10% (results).

- Technology: Ubisoft [UBI.FR] -18.5% (earnings; guidance).

- Telecom: Deutsche Telekom [DTE.DE] -1.0% (results).

-Utilities: Engie [ENGI.FR] +3.0% (results), United Utilities [UU.UK] -1.5% (results), RWE [RWE.DE] -2.0% (results).

Speakers

- France President Macron commented that had no longer a level playing field between EU and elsewhere; tariffs were not the right approach

- German Econ Min Reiche stated that the US remained our partner not an opponent.

- Pres Trump stated that would like to go to Turkey on Friday, if appropriate; Hoped Russia and Ukraine were able to 'do something’, Trying to give Yemen and Syria a chance. India has offered to drop all tariffs on U.S.

- Treasury Sec Bessent commented that was very important step to establish relationship with China; Over next 90 days we can accomplish a lot. Now hd a mechanism with China counterparts.

- China Commerce Ministry (MOFCOM) commented that was always open to resolving economic and trade relations offline.

Currencies/fixed income

- USD began the session on soft footing as FX dealers continue to debate if the US dollar reversal signaled a deliberately weak USD policy pursued by the Trump administration. Market speculated that President Trump could seek agreements with other countries to devalue the USD as part of trade deals. Speculation comes after US and South Korea discussed exchange rate polices last week.

- Focus on Fed Chair Powell with his first public remarks since last week’s policy meeting.

- EUR/USD range bound between 1.1200-50 area.

- GBP/USD unable to capitalize on its best GDP growth in a year. Markets dialed back the prospects of a Jun BOE rate cut.

- USD/JPY probed the 145.50 area before consolidating.

Economic data

- (NL) Netherlands Apr Unemployment Rate 3.8% v 3.9%e.

- (UK) Mar Monthly GDP M/M: 0.2% v 0.0%e.

- (UK) Q1 Preliminary GDP Q/Q: 0.7% v 0.6%e; Y/Y: 1.3% v 1.2%e.

- (UK) Q1 Preliminary Private Consumption Q/Q: 0.2% v 0.5%e; Government Spending Q/Q: -0.5% v +0.5%e; Gross Fixed Capital Formation Q/Q: 2.9% v 0.2%e; Exports Q/Q: 3.5% v 2.2%e; Imports Q/Q: +2.1% v -0.5%e.

- (UK) Q1 Preliminary Total Business Investment Q/Q: 5.9% v 0.4%e; Y/Y: 8.1% v 2.3%e.

- (UK) Mar Industrial Production M/M: -0.7% v -0.5%e; Y/Y:-0.7% v -0.8%e.

- (UK) Mar Manufacturing Production M/M: -0.8% v -0.7%e; Y/Y: -0.8% v -0.5%e.

- (UK) Mar Construction Output M/M: 0.5% v 0.2%e; Y/Y: 1.4% v 1.3%e.

- (UK) Mar Index of Services M/M: 0.4% v 0.1%e; 3M/3M: 0.7% v 0.7%e.

- (UK) Mar Visible Trade Balance: -£19.9B v -£19.0Be; Overall Trade Balance: -£3.7B v -£2.0Be.

- (DE) Germany Apr Wholesale Price Index M/M: -0.1% v -0.2% prior; Y/Y: 0.8% v 1.3% prior.

- (NO) Norway Q1 Overall GDP Q/Q: -0.1% v -0.9% prior; GDP Mainland Q/Q: 1.0% v 0.6%e.

- (NO) Norway Apr Trade Balance (NOK): 55.9B v 59.4B prior.

- (DK) Denmark Apr PPI M/M: -1.8% v -2.0% prior; Y/Y: 10.3% v 13.2% prior.

- (RO) Romania Q1 Advance GDP Q/Q: 0.0% v 0.3%e; Y/Y: 0.2% v 0.9%e.

- (JP) Japan Apr Preliminary Machine Tool Orders Y/Y: 7.7% v 11.4% prior.

- (CH) Swiss Apr Producer & Import Prices M/M: 0.1% v 0.1% prior; Y/Y: -0.5% v -0.1% prior.

- (FR) France Apr Final CPI M/M: 0.6% v 0.5% prelim; Y/Y: 0.8% v 0.8% prelim.

- (FR) France Apr Final CPI EU Harmonized M/M: 0.7% v 0.6% prelim; Y/Y: 0.9% v 0.8% prelim; CPI (ex-Tobacco) Index: # v 119.24 prior.

- (CH) Swiss Q1 Preliminary GDP (Sport Adj) Q/Q: 0.7% v 0.4%e.

- (PL) Poland Q1 Preliminary GDP Q/Q: 0.7% v 0.1%e; Y/Y: 3.2% v 3.2%e.

- (PL) Poland Apr Final CPI M/M: 0.4% v 0.4% prelim; Y/Y: 4.3% v 4.2% prelim.

- (TR) Turkey Apr Central Gov't Budget Balance (TRY): -174.7B v -261.5B prior.

- (UK) Q1 Output Per Hour Y/Y: -0.2% v -0.5% prior.

- (IT) Italy Mar General Government Debt: €3.304T v €3.024T prior (record level).

- (EU) Euro Zone Q1 Preliminary GDP (2nd of 3 readings) Q/Q: 0.4% v 0.4% advance; Y/Y: 1.2% v 1.2% advance.

- (EU) Euro Zone Q1 Preliminary Employment Q/Q: % v 0.1% prior; Y/Y: % v 0.7% prior.

- (EU) Euro Zone Mar Industrial Production M/M: % v 1.8%e; Y/Y: % v 2.2%e.

- (CY) Cyprus Q1 Preliminary GDP Q/Q: 1.3% v 0.2% prior; Y/Y: % v 2.6% prior.

Fixed income issuance

- (UK) DMO sold £4.25B in 0.125% Jan 2028 Gilts; Avg Yield: 3.768% v 3.631% prior; Bid-to-cover: 3.52x v 3.84x prior; Tail: 0.7bps v 0.4bps prior.

- (SE) Sweden sold total SEK750M vs. SEK750M indicated in 2032 and 2036 inflation-linked bonds.

Looking ahead

- (NG) Nigeria Apr CPI Y/Y: 23.5%e v 24.2% prior.

- 05:25 (EU) Daily ECB Liquidity Stats.

- 05:30 (ZA) South Africa Mar Total Mining Production M/M: +2.3%e v -4.4% prior; Y/Y: -4.6%e v -9.6% prior; Gold Production Y/Y: No est v -7.6% prior; Platinum Production Y/Y: No est v -23.9% prior.

- 05:30 (HU) Hungary Debt Agency (AKK) to sell 3-year, 5-year and 10-year bonds.

- 05:40 (UK) BOE 7-day short-term repo operation (STR).

- 06:00 (IE) Ireland Mar Trade Balance: No est v €12.9B prior.

- 06:00 (VN) Vietnam Finance Ministry announcement on upcoming bond issuance (held on Wed).

- 06:15 (ES) ECB de Guindos (Spain).

- 07:00 (RO) Romania to sell RON500M in 6-month bills.

- 07:00 (RO) Romania to sell RON500M in 6.3% Apr 2028 bonds.

- 07:30 (IT) ECB’s Cipollone (Italy).

- 08:00 (BR) Brazil Mar Retail Sales M/M: 1.0%e v 0.5% prior; Y/Y: -0.7%e v +1.5% prior.

- 08:00 (BR) Brazil Mar Broad Retail Sales M/M: 2.0%e v -0.4% prior; Y/Y: -0.9%e v +2.4% prior- 08:00 (BR) Brazil CONAB Production.

- 08:00 (UK) Daily Baltic Dry Bulk Index.

- 08:15 (CA) Canada Apr Annualized Housing Starts: 226.2Ke v 214.2K prior.

- 08:30 (US) May Empire Manufacturing: -8.0e v -8.1 prior.

- 08:30 (US) May Philadelphia Fed Business Outlook -11.2e v -26.4 prior.

- 08:30 (US) Apr Advance Retail Sales M/M: 0.0%e v 1.5% prior (revised from 1.4%); Retail Sales (ex-auto) M/M: 0.3%e v 0.6% prior (revised from 0.5%);; Retail Sales (Ex-auto/gas): 0.3%e v 0.9% prior (revised from 0.8%);; Retail Sales (Control Group): 0.3%e v 0.4% prior.

- 08:30 (US) Apr PPI Final Demand M/M: 0.3%e v -0.4% prior; Y/Y: No est v 2.7% prior.

- 08:30 (US) Apr PPI (ex-food/energy) M/M: 0.3%e v -0.1% prior; Y/Y: No est v 3.3% prior.

- 08:30 (US) Apr PPI (ex-food/energy/trade) M/M: No est v 0.1% prior; Y/Y: No est v 3.4% prior.

- 08:30 (US) Initial Jobless Claims: 228Ke v 228K prior; Continuing Claims: 1.89Me v 1.879M prior.

- 08:30 (CA) Canada Mar Manufacturing Sales M/M: -1.9%e v +0.2% prior; Wholesale Sales (ex-petroleum) M/M: -0.3%e v +0.3% prior.

- 08:30 (CL) Chile Central Bank (BCCh) Apr Minutes.

- 08:30 (US) Weekly USDA Net Export Sales.

- 08:40 (US) Fed Chair Powell at conference.

- 09:00 (RU) Russia Gold and Forex Reserve w/e May 9th: No est v $677.8B prior.

- 09:00 (CA) Canada Apr Existing Home Sales M/M: +1.0%e v -4.8% prior.

- 09:15 (US) Apr Industrial Production M/M: +0.1%e v -0.3% prior; Capacity Utilization 77.8%e v 77.8% prior; Manufacturing Production: -0.2%e v +0.3% prior.

- 10:00 (US) May NAHB Housing Market Index: 40e v 40 prior.

- 10:00 (US) Mar Business Inventories: 0.2%e v 0.2% prior.

- 10:00 (UK) BOE’s Dhingra (dovish dissenter)

- 10:30 (US) Weekly EIA Natural Gas Inventories.

- 11:00 (PE) Peru Apr Unemployment Rate: 6.3%e v 6.6% prior.

- 11:00 (PE) Peru Mar Economic Activity Index (Monthly GDP) Y/Y: 4.7%e v 2.7% prior.

- 11:30 (IL) Israel Apr CPI M/M: 0.6%e v 0.5% prior; Y/Y: 3.1%e v 3.3% prior.

- 11:30 (US) Treasury to sell 4-Week and 8-Week Bills.

- 12:00 (CO) Colombia Q1 GDP Q/Q: 0.9%e v 0.6% prior; Y/Y: 2.4%e v 2.3% prior.

- 12:00 (CO) Colombia Mar Economic Activity Index (Monthly GDP) Y/Y: 3.0%e v 1.8% prior.

- 14:05 (US) Fed Barr.

- 15:00 (MX) Mexico Central Bank (Banxico) Interest Rate Decision: Expected to cut Overnight Rate by 50bps to 8.50%.

- 17:00 (KR) South Korea Apr Import Price Index M/M: No est v -0.4% prior; Y/Y: No est v 3.4% prior.

- 17:00 (KR) South Korea Apr Export Price Index M/M: No est v 0.3% prior; Y/Y: No est v 6.3% prior.

- 18:30 (NZ) New Zealand Apr Manufacturing PMI: No est v 53.2 prior.

- 19:00 (US) Fed’s Barkin.

- 19:50 (JP) Japan Q1 Preliminary GDP Q/Q: -0.1%e v +0.6% prior; Annualized Q/Q: -0.3%e v +2.2% prior; GDP Nominal Q/Q: 0.8%e v 1.1% prior.

- 19:50 (JP) Japan Q1 Preliminary GDP Deflator Y/Y: 3.2%e v 2.9% prior; Private Consumption Q/Q: 0.1%e v 0.0% prior; Business Spending Q/Q: 0.6%e v 0.6% prior; Inventory Contribution % to GDP: 0.2%e v -0.3% prior; Net Exports Contribution % to GDP: -0.5%e v +0.7% prior.

- 20:30 (SG) Singapore Apr Non-Oil Domestic Exports Y/Y: 4.0%e v 5.4% prior; Electronic Exports Y/Y: No est v 11.9% prior.

- 20:30 (AU) Australia to sell A$800M in 2.5% 2030 bonds.

- 23:00 (NZ) New Zealand Apr Non Resident Bond Holdings: No est v 61.9% prior.

- 23:00 (NZ) New Zealand Q2 Inflation Expectation Survey: 2-year Outlook: No est v 2.1% prior.

- 23:30 (JP) Japan to sell 3-Month Bills.

- 23:35 (CN) China to 2027 and 2045 bonds.