Comment: All-Time High on Wall Street, Disappointing Data from China
May 13, 2014 7:36 am
European stock markets are steady Tuesday, trading higher on strong overnight leads in Asia and the US with market participants enthused by the improving global fundamentals in the form of stronger macro and corporate readings.
There’s continued central bank activism as the ECB may respond with stimulus next month and the Fed retains an accommodative stance. Global stock markets are at fresh six-year highs as such, though it must be noted that further evidence of slowing activity in China together with ongoing worries about the tensions in Ukraine combine to hamper appetite for risk.
Gains on Wall Street Monday provide the biggest support to Europe share markets this Tuesday with the S&P 500 closing at a record 1897 – stock futures are currently suggesting another positive open in the US later today with attention on retail sales data.
In Europe, all major benchmark indices are tracking higher at the moment, with the exception of the Italian market which is underperforming peers. Traders are keeping an eye on out on the German ZEW survey which is a gauge of investor and analyst. Expectations are for a drop in the ZEW this month to 40 from 43.2 in April.
Attention this week remains on major global central banks with Fedspeak suggesting that the Fed is in little mood to tighten monetary policy soon and the ECB perhaps looking to cut interest rates next month as low-inflation and a stronger euro currency remain a great concern for the euro zone at a time when the a mild recovery is in play in the region.
That’s helped to pressure government bond yields with US Treasury yields steady at 2.65% and German Bunds flat at 1.4%. In the FX space, the euro is up gaining some ground following weakness in Monday’s session on prospects of more ECB easing but the Australian dollar is weaker in response to the disappointing data out of China. Data out of the country suggests the world’s second biggest economy economy saw industrial output and retail sales grow less than expected which is weighing on global commodity prices, particularly in the London market.
China’s industrial production growth dipped to its lowest in five years last month while retail sales increased by 11.9% year on year in April which happens to be the slowest expansion in retail sector growth since December 2008.
Looking ahead, other than US retail sales the world’s largest economy will report updated readings on import prices and business inventories.
European stock markets are steady Tuesday, trading higher on strong overnight leads in Asia and the US with market participants enthused by the improving global fundamentals in the form of stronger macro and corporate readings.
There’s continued central bank activism as the ECB may respond with stimulus next month and the Fed retains an accommodative stance. Global stock markets are at fresh six-year highs as such, though it must be noted that further evidence of slowing activity in China together with ongoing worries about the tensions in Ukraine combine to hamper appetite for risk.
Gains on Wall Street Monday provide the biggest support to Europe share markets this Tuesday with the S&P 500 closing at a record 1897 – stock futures are currently suggesting another positive open in the US later today with attention on retail sales data.
In Europe, all major benchmark indices are tracking higher at the moment, with the exception of the Italian market which is underperforming peers.
Traders are keeping an eye on out on the German ZEW survey which is a gauge of investor and analyst. Expectations are for a drop in the ZEW this month to 40 from 43.2 in April.
Attention this week remains on major global central banks with Fedspeak suggesting that the Fed is in little mood to tighten monetary policy soon and the ECB perhaps looking to cut interest rates next month as low-inflation and a stronger euro currency remain a great concern for the euro zone at a time when the a mild recovery is in play in the region.
That’s helped to pressure government bond yields with US Treasury yields steady at 2.65% and German Bunds flat at 1.4%. In the FX space, the euro is up gaining some ground following weakness in Monday’s session on prospects of more ECB easing but the Australian dollar is weaker in response to the disappointing data out of China. Data out of the country suggests the world’s second biggest economy economy saw industrial output and retail sales grow less than expected which is weighing on global commodity prices, particularly in the London market.
China’s industrial production growth dipped to its lowest in five years last month while retail sales increased by 11.9% year on year in April which happens to be the slowest expansion in retail sector growth since December 2008.
Looking ahead, other than US retail sales the world’s largest economy will report updated readings on import prices and business inventories.
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