Feeling of market, by Alberto Carbonell

The stage of volatilities with an upward trend lived yesterday another chapter in a marked meeting for the return movements. In this occasion the volatility came for the statements of members of the members of the central banks and the worries for the inflation and the growth. Yesterday had lots rumorología on the tool that you would be able to be preparing the ECB to avoid the extension of the spreads in the moment that they finish the purchases, but it seems that would be in a very early phase and that they should produce great extensions so that this was implemented. From China knew that the Banco Popular of China trimmed the prime rate of loans to five years (a reference for the mortgage rates) until 4.45% from 4.60%, in a great reduction of the planned one. The Chinese real estate market has been low pressure during several months and both the sales and the prices of the housing are falling. In addition, the rest of the economy is low the pressure of the blockades of COVID-19. Unlike the Western central banks, the PBoC is in way of relaxation, which possibly owe back the overall growth. For today's meeting have the publication of the reliable index of the Euro area of May as a reference more outstanding.

 

Foreign Currencies by Enrique Velasco

The Wednesday's negative tone with the great American fall in the stock market of the last two years had its continuation yesterday. However, unlike the seen thing in these similar last episodes, the USD yielded field when dealing with its main members except for the JPY and the CHF that seems that they come back to the most traditional orthodoxy, which we do thinking that the American currency would be able to have already in price a lot of the potential stage negative that is considered to date. This joined to significant technical levels that we have visited recently as in the case of the eurusd (1.0360), has provided the rebound of lots of these crossroads. From the point of view macro, has neither helped to maintain the rally of the USD the worse details that we have gone knowing, very conditional upon the loss of the American consumer's disposable incomes because of the inflation. An increasing dread to an overall recession in the next few months would be able to be the catalyst to see another bullish leg in the DXY. For this reason, for the consolidation of these levels or even see a still great recession of the USD seems fundamental that the market is stabilised and see a good behaviour of assets of risk that it entails a fall in the volatilities. Another currency that it has recovered glow in finalise them sessions is the GBP. The spectacular details of joined employment to the good detail of retail salts that have known this morning distance the threat recesionista and it has allowed the crossroad recover from 1.2160 at 1.25. The arguments so that this movement has continuation in the short term would come thanks to it already mentioned with respect to the risk-on given the component of Beta that has the currency. Regarding the CHF and to the JPY and its good behaviour before this last depreciation of the encouragement of investors, you would be able to say that the dreads inflationists and possible reactions of its respective central banks (up to now characterised both by its inaction) can take the relay as driver of both crossroads when dealing with the USD.

 

Yesterday's market

EZ

The Balance sheet for Current Account fell in 1.6b in March.

US
demands of unemployment benefit were 218k (200k expected), the existing sale of houses fell a - 2.4% mm when dealing with the - 2.3% estimated. The indicators adelantadados fell 0.3% when dealing with 0% estimated.

 

Schedule of events

USA

Without details

Europe

EZ 4.00pm consumer confidence (May.)

 

Market summary

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