Market sentiment, by María Briongos
After the recent volatility of markets provoked by the dreads inflationary, the last meeting went a becalmed session in which the stock exchanges closed with rises that they have continued in Asia, where the Topix of Japan went up 1.8%, or the Hang Seng, of Hong Kong, that it summed 1%. On the market of debt we must emphasise the – something more loose - auction of the 30 years American (yld: 2,395%) with a btc of 2.20 vs 2.47 of the previous one. Nonetheless and as a good pointed out this morning our trades of fixed income, the majority of analysts see the return out of the 30 years in the area of 2.40/2.5%.
In Spain live a relatively active day, with sales in screens in stretch 10-30 years in the morning. There was a flow salesman of 550mios in the 5y that changed the feeling of the day and it made that saw extensions in that term - that it had state borne by the purchases of domestic -. The focus of the market will be the announcement of the bonds that will auction the Treasure next week.
Weak session in Italy, where still see little buyer outright despite the fact that the 10 years is above 1% and the 30 years above 2%, Today the details of retail sales, industrial production and confidence of Michigan in the United States, can confirm that the economy is earning boost. In Europe will know the CPI of Spain, and the ECB publishes the report of the meeting of April.
The initial profits applications for unemployment fell to 473k (490k expected).
The PPI end of the demand of April grew 0.6% M (0.3% expected).
Foreign Currency, by Miguel Ángel Arranz
Several leaders of the FED tried soothe to the market with reassuring messages on the inflation, and in fact they achieved it. Left of course the central bank does not have no rush in going up the interest rates and they consider that the rise of the inflation is temporary, and they even consider as a positive that it exceeds slightly the objective of 2%. They insist in which the priority is the employment and seems that so far the market them is buying the argument. It is fair to say that to the American economy him are for creating still more of 8 million work positions to reach levels pre-pandemic.
Results evident that the American FED is going to lead the cycle of dropped out of stimuli, just as it already made recently the Central bank of Canada. The FED takeover decisions with lots more agility and flexibility that the ECB, that it has fight with different sensitivities of many European countries, which it does being slower in its decision making.
We still see to the EUR/USD with little volatility, with a range for this year of 1.1700-1.23/25. We watch with close attention the crossroad$/CNY, since leads movements of the $ with respect to the rest of the crossroads. Many treasury managers and tables are taking positions in currencies linked to the price of the raw materials, that they are giving major retornos this year: AUD, NZD, ZAR or NOK. Additionally are waking emerging currencies interest as the BRL, MXN or TRY, that they have more beta and therefore they give more opportunities of obtaining good returns, both via interest rate and by type of change.
Schedule of events
SP 9.00am CPI (April F)
US 2.30pm Retail sales (April)
US 3.15pm Industrial production (April)
US 4.00pm Feeling of the Universdad of Michigan (May)