The potential for stimulus from the ECB at its June 5th meeting remains a key focus for trading and speculation. There have been conflicting reports between yes and maybe around whether Germany’s Bundesbank (widely seen as the most conservative of the ECB member banks) would be onside with a stimulus package if the ECB were to reduce its inflation forecast. EUR continues to tumble on speculation that big stimulus may be on the way but the Dax, CAC and FTSE
have all stalled near key channel high resistance levels.
US indices, meanwhile, have not only stalled, they have turned lower today after US April retail sales came in below expectations. Even though a big upward revision to March sales to 1.5% from 1.1% raised the bar, this action shows that markets are very fickle at the moment with ECB speculation and a historically weak time of the year seasonally duking it out for domination. It also indicates what while yesterday showed there are still traders looking for reasons to buy, there are still a lot looking for reasons to sell too.
The Australian S&P/ASX index also struggled with its 52-week high overnight despite posting some gains with more of the action focused in Chinese and Japanese indices which are still bouncing back from depressed levels. China data was a bit soft keeping the pressure on the government to do something. NZD and AUD are among the better performers today on continued anticipation more may be on the way.
Despite their post sales slip the Dow Industrials continue to trade above yesterday’s 16,600 breakout point. It’s another light day for corporate and economic news so the battle between stimulus speculation and seasonal factors may continue to dominate trading for the next several sessions.
EnCana $0.31 vs street $0.18
Economic reports released overnight and this morning include:
US retail sales 0.1% vs street 0.4%
US retail ex auto 0.0% vs street 0.6%
China retail sales 11.9% vs street 12.2%
China industrial production 8.7% vs street 8.9%
Spain house transactions 22.8% vs previous (27.6%)
Sweden consumer prices 0.0% street (0.1%)
Italy consumer prices 0.5% vs street 0.6%
Germany ZEW current 62.1 vs street 60.5
Germany ZEW expectations 33.1 vs street 40.0
Eurozone ZEW expectations 55.2 vs previous 61.2
NZ food prices 0.6% vs previous (0.3%)
Australia home loans (0.9%) vs street 1.0%
Australia house price index 10.9% vs street 10.4%
Economic reports due later today include:
There are no major reports scheduled for North America or Europe today.