Big day for economic data, and we'll hear from Trump a few times

Good morning

US equities had another decent day despite European markets looking more mixed yesterday.  Overnight Asian markets were generally positive.  We didn’t see a great deal of action in the currency markets yesterday, GBPUSD sat in the low 1.34’s for much of the day while EURUSD traded in the high 1.13’s, both still around those levels as I type. 

Aussie inflation data was released overnight, coming in slightly above expectations, and AUD pushed higher as a result.  GBPAUD, which had traded above 2.1000 yesterday is now 2.0910, having seen a low of 2.0860. while AUDNZD pushed up from 1.0740 to 1.0810, now back to 1.0790.  AUDUSD is just around the 0.6400 level with 0.6440 proving to be some sort of decent upside resistance area.  A 25bps cut in rates by RBA is still expected in May.

UK trade negotiators have warned that a US trade deal could face problems if UK and EU align closer.  There has recently been talk of UK drafting a statement that would see the UK and EU rejecting the most controversial of Trumps’ policies, while I see this morning that UK are close to agreeing to meet EU’s food standards, something that I’m sure would disappoint the US who want to sell their chlorinated chicken and hormone treated beef to the rest of the world.

Canada voted in Carney’s Liberals but they failed to get the majority required.  Trump has already spoken to Carney to congratulate him, Carney has said both leaders agreed on Canada’s status as a sovereign nation and the importance of working together for their mutual benefit.   

In sport, Arsenal put up a valiant fight against a slick PSG side but lost 1-0, leaving them with a lot of work to do in the second leg next week.  Barcelona take on Inter Milan this evening in their semi-final. 

Today’s calendar is pretty full with GDP numbers from Germany EU and US, we also have the Core PCE number from the US this afternoon.  US ADP employment is also out following a weaker than expected JOLTS release yesterday.  I see Trump speaking several times today, he’s just passed 100 days in the role during which time we have seen huge volatility in the financial markets and US consumer confidence is at a five year low.  Expect more talk of Trumps desire for rate cuts and no doubt he’ll take the opportunity to tell Powell what a bad job his doing over at the Fed.

If you thought it was warm and sunny yesterday, its likely to be even warmer today so make sure you get outside at some point for a much needed vitamin D top up.  Could be up to 25°c this afternoon, and the forecast suggests it’ll be a couple of degrees warmer tomorrow.

Have a great day….

-  08.55 German GDP, unemployment

-  10.00 EU GDP

-  12.00 BoEs Lombardelli speaks

-  13.00 German HICP

-  13.15 US ADP employment change

-  13.30 US GDP, Core PCE, personal income/spending

-  14.45 US Chicago PMI

-  15.00 US pending home sales

-  16.00 President Trump speaks

-  16.30 BoEs Lombardelli speaks

-  21.00 President Trump speaks

-  01.00 President Trump speaks

-  02.30 AUS trade balance

-  03.30 BoJ rate announcement

Spain and Portugal suffer huge, unexplained power outages

European stocks were up around 0.5% yesterday, faring slightly better that their US equivalents.  Asian markets were also positive overnight.  Putin has said there will be a three day ceasefire next week, starting from 8th May which coincides with celebrations marking the end of World War II.  Whether this holds remains to be seen, there have been several such ceasefires in the past three or so years, none of which lasted particularly well.  I presume Russia may call a ceasefire, but it may not stop Ukraine from attacking, which then opens the door for Russia to defend itself.  And of course, then accuse Ukraine of not wanting peace.   

Closer to home, a huge power outage across large parts of Spain and Portugal caused widepsread havoc yesterday.  Of course, it looks very much like an attack on infrastructure but that has been denied.  Portugal blames the outage on extreme temperature variations that caused some vibration in high voltage power lines in Spain, while some blame atmospheric conditions which is leading many to think of solar flares.  Power is slowly returning.

In the currency markets, we had a lower US dollar which sent GBPUSD up to 1.3440 and EURUSD to 1.1425, both 35 pisp or so off those highs as I type.  USDCHF sank to 0.8200, below even the lows seen in Jan 2015 when SNB pulled the plug on the floor they had in place at 1.2000 for so long.  Markets are looking for any update on various trade talks, and also looking for tariff amendments on specific items such as auto-parts that could be seen as early as tomorrow.

In Canada, Mark Carney and his Liberals have won the elections in Canda, although it is not yet clear whether they have enough seats for a majority.  USDCAD is 1.3830, just a smidge lower than this time yesterdya, while GBPCAD is higher at 1.8550.

Leeds Utd beat Bristol City yesterday to go back to the top of the Championship withone match remaining.  Bristol are in 5th place in the table but some 30 points behind the two top teams, highlighting the gulf between Leds, Burnely and those teams fighting for the play off spots.  Tonight sees Arsenal take on PSG in the Champions league semi-final.  PSG have beaten both Liverpool and Aston Villa in the latter stages of the competiion, Arsenal will be hoping they can seek some revenge for the English clubs so far knocked out. 

A slightly busier calendar today but still not quite the big stuff that comes later this week.  US JOLTS could be interesting given we know it is watched by the Fed but it will certainly be overshadowed by US GDP, core PCE and nonfarms.   Aussie inflation numbers due out overnight, AUDUSD is up around its highest levels for 2025, helped more by USD weakness than AUD strenghth.  AUDNZD currently 1.0760, GBPAUD 2.0865.

We had some superb weather yesterday and in for more of the same today.  A good friend is back from Australia for a month or so, and the in-laws who have been down under for a while also arrive back today.  Talk about good timing!

-  10.00 EU consumer confidence

-  10.40 BoEs Ramsden speaks

-  14.00 US house prices

-  15.00 US JOLTS job openings, consuimer confidence

-  00.50 Japan trade

-  02.30 AUS CPI

-  02.30 China NBS manufacturing PMI

-  02.45 China Caixin manufacturing PMI

-  07.00 German GDP, retail sale, unemployment

Markets and weather both likely to heat up later this week

Good morning

I hope you had a terrific weekend.  Weather was good, and it looks like we’ll have the same, or warmer, for the coming week.  No time to be stuck inside an office, but my ‘remote working’ hasn’t yet stretched to setting up a a desk outside.  That would be taking things a little too far perhaps.

A great weekend for sport, with the Eubank/Benn fight living up to its hype, although the fact Eubank is still in hospital for checks demonstrates just how gruelling the bout was.  One of the better sporting performances coming from the Spurs stadium this season, that’s for sure.   The London marathon once again produced some super-human performances, the mens race was won in the time of 2 hours, 2 minutes and 37 seconds, a pace that no normal person could keep up with for more than twenty metres or so.  The world record was broken in the women’s race with a time or 2 hours, 15 minutes and 50 seconds, again astonishing.  Congratulations to all participants, really quite an achievement.

In football, Liverpool won the premier title with a 5-1 win over a dismal Spurs team, while Crystal Palace and Man City made it into the FA cup final with wins over Villa and Forest respectively. 

To the markets, where hopes of trade deals to end this tariff standoff continue to help equities with global markets all generally higher Friday and overnight.  Futures prices are a little mixed ahead of this morning European open.  US still seem convinced they are in trade talks with China, while China seem to deny any such discussions. 

The US dollar is a touch higher this morning but still well within the ranges seen late last week, GBPUSD now 1.3300, EURUSD 1.1345, which leaves GBPEUR around 1.1730.   Lots of talk about another ECB 25bps rate cut in June, although ECBs Simkus has said a larger cut could be necessary. 

The Swiss Franc is in focus having pushed above multi-year highs, with USDCHF seeing a low last week around 0.8040, while GBPCHF has dropped from a high at the end of last month near 1.1500 to a low just above 1.0600, although it has since recovered to 1.1045.  Plenty of talk of Swiss rates going negative to slow this CHF appreciation.

Canada goes to polls today in their elections to find a new government.  Mark Carney is favourite but a majority is far from a certainty.  US/Canada trade relationship and Canada’s sovereignty high on the priority list for voters. USDCAD  currently 1.3875, with GBPCAD 1.8455.  Final results should be out by this tomorrow.

Not much else on the agenda today, indeed you’ll see a lack of calendar below, not because I have forgotten but because there is no significant releases due out and Fed officials are in their pre-FOMC blackout period.  Still, the rest of the week makes up for that, with employment numbers, GDP, core PCE and ISM PMI from the US and EU GDP and inflation readings.  Aussie inflation, trade and retail sales will keep our friends down under on their toes.

Otherwise we are looking out for any news of a peace deal in Ukraine.  Trump and Zelensky met in Rome, I have to say that although I’m not really religious I thought their publicised meeting at the Pope’s funeral was a bit disrespectful.  Something behind closed doors would have surely been more appropriate.  Anyway all the talk is really how much ground Ukraine will need to concede to find peace and how much Putin really wants peace.  Even Trump has voiced his displeasure about the ongoing missile strikes by Russia on Ukraine.

That’s about all for now.  Mark’s Leeds play this evening, a win puts them back up at the top of the Championship on goal difference, but their opponents Bristol City have their own place in the play-off positions to fight for.  Could be a good game.  European action this week sees Arsenal in the Champions League semi-final, Spurs and Man Utd in the Europa league semifinals despite their terrible league performances, and Chelsea in their Europa conference league semi-final. 

Have a great day…