Chinese indices had staged a big relief rally yesterday but weakened toward the end of their trading day leaving traders to wonder if their big unwinding is about to continue or if indices can start to stabilize. Today’s manufacturing and non-manufacturing PMI reports present an opportunity for indices to respond to something other than their own internal technical and efforts by the PBOC and the government to salvage the situation.
Japanese indices like the Nikkei
may also be active today with the Tankan survey due out along with the monthly PMI report which is also scheduled for many other countries around the world. AUD and NZD have been heading in opposite directions after yesterday
S weak New Zealand ANZ survey report sent NZD sharply lower. The two dollars could be active again today with Australia PMI and commodity price reports on the way.
US and European indices had another choppy day but finished close to flat Greece continued to dominate the news with all kinds of rumours and denials flying over possible negotiations after the country announced it won’t be able to make its payment to the IMF and apparently requested a new 2-year bailout program. German PM Merkel apparently said no to any new negotiations before Sunday’s referendum but her finance minister Scheuble suggested Greece could access emergency funding so it’s all clear as mud. Developments surrounding Greece could come out of the blue at any time of the day or night which could keep markets active right through the week.
While stocks ended up steady, EUR fell back Tuesday while CHF fell even more suggesting the rumoured SNB intervention appears to be working. CAD weakened after Canadian GDP came in below expectations raising questions of whether the oil crash has pushed the country into recession and if the Bank of Canada may need to cut interest rates again.
Crude oil prices bounced back Tuesday. Although there wasn’t an Iran nuclear deal, the deadline was apparently extended by another week, and more top people were reportedly joining the talks so they could be entering their final stages one way or the other. Wednesday brings the weekly US DOE inventory report. The API repost showed an increase so oil could be active over the next day.
Wednesday also brings the US ADP payrolls report, setting the stage for Thursday’s nonfarm payrolls, which could spark another round of speculation on when the Fed may start raising interest rates although external events like potential defaults by Greece and/or Puerto Rico may yet become a factor.
There have been no major corporate reports after the US close today.
Significant announcements released overnight include:
US Chicago PMI 49.4 vs street 50.0 vs previous 46.s
US consumer confidence 101.4 vs street 97.4
Canada Apr GDP (0.1%) over month vs street 0.1%
Canada Apr GDP 1.2% vs street 1.5%
UK Q1 GDP 2.8% vs street 2.5%
Germany retail sales (0.4%) vs street 2.8%
Germany unemployment chang (1K) vs street (5K)
Germany unemployment rate 6.4% as expected
France consumer spending 1.8% vs street 1.5%
Italy unemployment rate 12.4% vs street 12.3%
Italy consumer prices 0.2% as expected
Eurozone unemployment rate 11.1% as expected
Eurozone consumer prices 0.2% as expected
Eurozone core CPI 0.8% as expected
Greece retail sales (3.3%) vs previous (0.4%)
Upcoming significant announcements include:
9:50 am AEST Japan Tankan Large Mfg Index street 12
9:50 am AEST Japan Tankan Large Mfg Outlook street 14
11:30 am AEST Australia building approvals street 1.2%
4:30 pm AEST Australia Commodity Index previous (19.5%)
8:15 am EDT US ADP Payrolls street 218K vs previous 201K
10:00 am EDT US construction spending street 0.4%
10:30 am EDT US crude oil inventories street (2.5 mmbbls)
Manufacturing PMI Reports:
9:30 am AEST Australia previous 52.3
11:00 am AEST China official street 50.4
11:00 am AEST China non-manufacturing previous 53.2
11:35 am AEST Japan previous 49.9
11:45 am AEST China HSBC street 49.6
3:00 pm AEST India previous 52.6
8:50 am BST France street 50.5
8:55 am BST Germany street 52.5
9:30 am BST UK street 52.5
9:45 am EDT US Markit street 53.4
10:00 am EDT US ISM street 53.2
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