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European macro data likely to set the tone


US equities closed mixed with the tech heavy Nasdaq Composite posting its sixth consecutive record high, although the Dow gave up a little ground on Trump ‘big bank break up’ fears. Markets were perhaps more focused on the US government remaining funded for another 5-months, avoiding another awkward shut-down like in late 2013, and optimistic rhetoric from Mnuchin offsetting easing inflation, lower PMI and ISM manufacturing.

Accendo Markets Analyst, Mike van Dulken commented – “Sentiment nonetheless remains biased positive, evident in the Nasdaq Composite posting fresh record highs, the Dow and S&P still close and the VIX volatility index at near 10yr lows suggesting an easing of recent geopolitical jitters. This despite Trump saying he wants to look at breaking up the big banks, one of the best performing sectors based on deregulation hopes since the new President was elected.”

After Monday’s Bank Holiday break the European markets got off to a positive start this morning, thanks to a mix of macro-news and earnings excitement.

Spreadex Analyst, Connor Campbell suggested – “In the UK there were a couple of things to explain the FTSE’s 30 point rise. First of all sterling is on the back foot against the euro and the dollar, shedding 0.3% against both after the bell. Secondly, BP has risen more than 2.5%, leading the likes of Shell higher in the process, thanks to a solid set of first quarter figures that saw the oil giant return to profit.

Still to come is Tuesday morning’s main focus – the UK’s latest manufacturing PMI. Analysts are once again expecting the figure to trip backwards, this time from 54.2 to 54.0 month-on-month; that would take the reading to a 5 month low, and continue the downward spiral that has been in place since 2017 began. The pound would likely bear the brunt of this drop, meaning, if those estimates are accurate, the currency’s current losses may only widen as the day goes on.”

In Europe, PMI Manufacturing prints for the Eurozone, France, Italy and Spain are all expected to gain ground in April, while Switzerland edges back and Germany holds firm. Unemployment in both Italy and the Eurozone may have improved a shade in March.

As we look further into the week, the US interest rate policy will be in focus as we move towards tomorrow’s Fed meeting.

ADS Securities Analyst, Konstantinos Anthis commented – “The dollar continues to enjoy support in expectation of a rate hike next month, however it could face a sharp sell-off if policymakers’ guidance doesn’t align with the elevated expectations of a hike next month.”

Look out for results today from from US big guns Ford, General Motors, Delta Airlines, Western Union, Andarko Petroleum and Apple.

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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