Earnings in full flow – Focus turns US GDP and Core PCE data

Notes/observations

- FTSE100 outperforms after busy morning for corporate results sees healthy performance in UK names.

- Macro focus on US Q1 GDP Price and Consumption. Japanese Yen holds above 155 against dollar despite intervention fears. Market watches for FX movement amid key economic data.

- Upcoming US premarket earnings: ARCH, BFH, BMY, CAT, CX, CMC, CMS, CNX, DOV, DTE, EME, GWW, HES, HOG, HTZ, IP, LUV, MO, MRK, NDAQ, NEM, OSK, RCL, SPGI, TSCO, TXT, UNP, VC, VLO, XEL.

- Asia closed mixed with KOSPI underperforming at -1.8%. EU indices are -0.7% to +0.6%. US futures are -0.3% to -0.9%. Gold +0.5%, DXY -0.3%; Commodity: Brent +0.1%, WTI +0.1%; Crypto: BTC -3.5%, ETH -3.2%.

Asia

- South Korea Q1 Advance GDP (1st of 3 readings) Q/Q: 1.3% v 0.6%e; Y/Y: 3.4% v 2.5%e.

- South Korea May Business Manufacturing Survey: 74 v 73 prior; Non-Manufacturing Survey: 71 v 69 prior.

- Japan Fin Min Suzuki reiterated stance that was watching FX moves closely and would handle appropriately; could not say much on FX at this point.

- China will implement a policy of ultra-long bond issuance.

Europe

- Spain PM Sanchez said to be considering resigning after a court launched an investigation into his wife for alleged influence-peddling and corruption.

Americas

-US Sec of State Blinken stated that was obliged to manage US and China relationship responsibly; raised concerns about China trade policies in meeting; Also raised concerns about China's non-market economic practices.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 -0.10% at 505.10, FTSE +0.69% at #, DAX -0.44% at 17,994.95, CAC-40 -0.38% at 8,061.32, IBEX-35 +0.41% at 11,073.44, FTSE MIB +0.03% at 34,280.00, SMI -0.53% at 11,310.91, S&P 500 Futures -0.54%].

Market focal points/key themes: European indices open mixed with a downward bias and stayed under pressure through the early part of the session; better performing sectors include materials and health care; sectors trending lower include consumer discretionary and industrials; FTSE-100 outperforming other indices following Unilever and Astrazeneca results; Anglo American confirms merger approach from BHP; STMicro cut outlook; TietoEVRY resolves not to sell of its banking unit; 3I to sell Nexeye to KKR; focus on Turkey central bank rate decision and US GDP to be released later in the day; earnings expected in the upcoming Americas session include Microsoft, Alphabet, Merck, Caterpillar and T-Mobile.

Equities

- Consumer discretionary: Hermes [RMS.FR] -1.0% (earnings), Delivery Hero [DHER.DE] +6.0% (earnings), Pernod Ricard [RI.FR] -2.5% (earnings).

- Consumer staples: Unilever [UNA.NL] +4.0% (earnings; positive volumes), Nestle [NESN.CH] -4.0% (earnings).

- Energy: Repsol [REP.ES] -2.0% (earnings).

- Financials: Deutsche Bank [DBK.DE] -0.5% (earnings), Barclays [BARC.UK] +4.5% (earnings), BNP Paribas [BNP.FR] +0.5% (earnings).

- Healthcare: Sanofi [SAN.FR] +3.5% (earnings), AstraZeneca [AZN.UK] +5.5% (earnings).

- Industrials: BASF [BAS.DE] -0.5% (earnings).

- Technology: STMicroelectronics [STM.FR] -2.5% (earnings; cuts outlook), ASML Holding [ASML.NL] +0.5% (TSMC will not need to use ASML’s High NA EUV lithography machines to build its next generation A16 (1.6nm chips), Adyen [ADYEN.NL] -13.5% (earnings).

-Telecom: WPP [WPP.UK] -2.5% (earnings).

-Materials: Anglo American [AAL.UK] +11.5% (confirms £31B all-stock bid from BHP; the deal would create the world's biggest copper miner).

Speakers

- ECB’s Schnabel (Germany) commented that goods inflation was dropping quickly, while services inflation proved sticky; Anchoring of inflation expectations was critical for monetary policy transmission.

- ECB's Muller (Estonia, hawk) commented that would not happy with back to back rate cuts.

- ECB Economic Bulletin noted that incoming information broadly confirmed the Governing Council’s previous assessment of the medium-term inflation outlook.

- Finland Finance Ministry updated its economic forecasts which cut the 2024 GDP growth from 0.7% to 0.0% and cut 2025 GDP growth from 2.0% to 1.6%.

Currencies/fixed income

- USD was slightly weaker against the European currencies. Focus on upcoming GDP data for the US later today.

- EUR/USD tested 2-week highs at 1.0720 while GBP/USD inched above the 1.25 level.

- USD/JPY holding well above the pivotal 155 level with focus on the upcoming BOJ decisions. Dealers note that BOJ was poised to keep policy steady with a ‘hawkish’ hold’ as the virtuous wage-price cycle kicked into gear and a weak yen currency spurring upside risks to inflation, The big question is if and when FX intervention occurs and if solo by the BOJ or coordinated by G7?

Economic data

- (DE) Germany May GfK Consumer Confidence: -24.2 v -26.0e.

- (SE) Sweden Mar PPI M/M: 0.6% v 0.0% prior; Y/Y: -0.6% v -1.3% prior.

- (NO) Norway Mar Trend Unemployment Rate: 3.8% v 3.9% prior.

- (FR) France Apr Business Confidence: 99 v 101e; Manufacturing Confidence: 100 v 103e; Production Outlook Indicator: -7 v -7 prior; Own-Company Production Outlook: 9 v 10 prior.

- (ES) Spain Mar PPI M/M: -2.2% v -2.6% prior; Y/Y: -8.2% v -8.5% prior.

- (SE) Sweden Apr Consumer Confidence: 88.9 v 87.6 prior; Manufacturing Confidence: 100.5 v 98.6 prior; Economic Tendency Survey: 95.0 v 93.1 prior.

- (HK) Hong Kong Mar Trade Balance (HK$): -45.0B v -45.7Be; Exports Y/Y: 4.7% v 2.3%e; Imports Y/Y: 5.3% v 2.4%e.

Fixed income issuance

- None seen.

Looking ahead

- (AR) Argentina Apr Consumer Confidence: No est v 36.7 prior.

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

- 05:30 (ZA) South Africa Mar PPI M/M: 1.0%e v 0.5% prior; Y/Y: 4.5%e v 4.5% prior.

- 05:30 (HU) Hungary Debt Agency (AKK) to sell 12-month Bills.

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

- 06:00 (UK) Apr CBI Retailing Reported Sales: -3e v +2 prior; Total Distribution Reported Sales: No est v 8 prior.

- 06:00 (FR) France Q1 Total Jobseekers: No est v 2.824M prior.

- 06:00 (CZ) Czech Republic to sell CZK5.0B in 6-month bills.

- 06:00 (RO) Romania to sell combined RON800M in 2026 and 2033 bonds.

- 07:00 (TR) Turkey Central Bank (CBRT) Interest Rate Decision: Expected to leave One-Week Repo Rate unchanged at 50.00%.

- 07:00 (UR) Ukraine Central Bank (NBU) Interest Rate Decision: Expected to cut Key rate by 50bps to 14.00%.

- 07:00 (BR) Brazil Apr FGV Construction Costs M/M: No est v 0.2% prior.

- 07:00 (CA) Canada Apr CFIB Business Barometer: No est v 52.7 prior.

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

- 08:00 (NO) Norway Central Bank (Norges) Bech-Moen.

- 08:30 (US) Q1 Advance GDP Annualized (1st of 3 readings) Q/Q: 2.5%e v 3.4% prior; Personal Consumption: 2.8%e v 3.3% prior.

- 08:30 (US) Q1 Advance GDP Price Index (1st of 3 readings) Q/Q: 3.0%e v 1.6% prior; Core PCE Q/Q: 3.4%e v 2.0% prior.

- 08:30 (US) Mar Advance Goods Trade Balance: -$91.0Be v -$90.3B prior (revised from -$91.8B).

- 08:30 (US) Mar Preliminary Wholesale Inventories M/M: 0.3%e v 0.5% prior; Retail Inventories M/M: 0.5%e v 0.6% prior (revised from 0.5%).

- 08:30 (US) Initial Jobless Claims: 215Ke v 212K prior; Continuing Claims: 1.82Me v 1.812M prior.

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

- 09:00 (RU) Russia Gold and Forex Reserve w/e Apr 19th: No est v $600.7B prior.

- 10:00 (US) Mar Pending Home Sales M/M: 0.2%e v 1.6% prior; Y/Y: -2.8%e v -2.2% prior.

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

- 11:00 (US) Apr Kansas City Fed Manufacturing Activity: -5e v -7 prior.

- 11:15 (DE) ECB’s Nagel (Germany).

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

- 13:00(US) Treasury to sell 7-year notes.

- 13:30 (IT) ECB’s Panetta (Italy).

- 18:00 (NZ) New Zealand Apr ANZ Consumer Confidence: No est v 86.4 prior.

- 19:01 (UK) Apr GfK Consumer Confidence: -20e v -21 prior.

- 19:30 (JP) Japan Apr Tokyo CPI Y/Y: 2.5%e v 2.6% prior; CPI (ex-fresh food) Y/Y: 2.2%e v 2.4% prior; CPI (ex-fresh food, energy) Y/Y: 2.7%e v 2.9% prior.

- 20:30 (SG) Singapore Q1 Final URA Private Home Prices Q/Q: No est v 1.5% prior.

- 21:30 (AU) Australia Q1 PPI Q/Q: No est v 0.9% prior; Y/Y: No est v 4.1% prior.

- 21:30 (AU) Australia Q1 Export Price Index Q/Q: -0.6%e v +5.6% prior; Import Price Index Q/Q: 0.1%e v 1.1% prior.

- (JP) Bank of Japan (BoJ) Interest Rate Decision: Expected to leave Target Range unchanged between 0.0-0.10%.

- (JP) BOJ Quarterly Outlook for Economic Activity and Prices (aka Staff Projections).

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