Comment: Disappointing US GDP Data, German Retail Sales Slump
May 30, 2014 7:04 am
European equity markets are set to end the month of May in the their best shape in more than six-years, thanks to another record high on Wall Street overnight amid growing hopes of more central bank largesse.
As it’s the last trading day of May, we are set to see increased volatility through the course of the session particularly with the lack of economic data in the euro zone to offer firm direction. Lower metal prices are weighing on mining stocks, however, other sectors are still attempting to push out gains.
Thursday’s poor US GDP data for the Q1 only served to remind investors that the US economy still has its work cut out in order to record strong growth this year. Although the weakness in the data was blamed on the poor weather conditions during the period, traders are of the view that the US economy’s fragility warrants further accommodative policy from the Federal Reserve.
Over here in Europe, major benchmarks are still finding much of their support built on expectations of increased stimulus next week, after European Central Bank President Mario Draghi pledged to ease monetary policy in June if necessary. Looking ahead, we have the Chicago PMIs and the University of Michigan consumer sentiment index out of the US economy later today – both are hotly anticipated.
Out of Europe so far, we have had German retail sales which fell unexpectedly in April – when taken with the batch of German data in recent week, this poor number adds to the growing worries that Q2 saw the country slow down. Sales were down 0.9% in April, compared to a rise of 0.1% in March and market expectations of a rise of 0.4%.
Overnight, Asian equities saw mixed trading, with Japanese stocks failing to respond to a deluge of data. The Nikkei 225 opened higher but by the end of the session, the index dropped into the negative zone. Inflation came in slightly higher than expected while household spending and production decreased; there’ll be a great deal of interest in the economic data over the next few months, which will show an indication of how robust the recovery is after April’s sales tax hike.
Chinese markets continued to shrug off ongoing concerns surrounding the financial sector. Meanwhile, new Indian PM Narendra Modi continued his busy first week in office, announcing his 10-point plan ahead of GDP figures for the first quarter due later on in the session.
European equity markets are set to end the month of May in the their best shape in more than six-years, thanks to another record high on Wall Street overnight amid growing hopes of more central bank largesse.
As it’s the last trading day of May, we are set to see increased volatility through the course of the session particularly with the lack of economic data in the euro zone to offer firm direction. Lower metal prices are weighing on mining stocks, however, other sectors are still attempting to push out gains.
Thursday’s poor US GDP data for the Q1 only served to remind investors that the US economy still has its work cut out in order to record strong growth this year. Although the weakness in the data was blamed on the poor weather conditions during the period, traders are of the view that the US economy’s fragility warrants further accommodative policy from the Federal Reserve.
Over here in Europe, major benchmarks are still finding much of their support built on expectations of increased stimulus next week, after European Central Bank President Mario Draghi pledged to ease monetary policy in June if necessary. Looking ahead, we have the Chicago PMIs and the University of Michigan consumer sentiment index out of the US economy later today – both are hotly anticipated.
Out of Europe so far, we have had German retail sales which fell unexpectedly in April – when taken with the batch of German data in recent week, this poor number adds to the growing worries that Q2 saw the country slow down. Sales were down 0.9% in April, compared to a rise of 0.1% in March and market expectations of a rise of 0.4%.
Overnight, Asian equities saw mixed trading, with Japanese stocks failing to respond to a deluge of data. The Nikkei 225 opened higher but by the end of the session, the index dropped into the negative zone. Inflation came in slightly higher than expected while household spending and production decreased; there’ll be a great deal of interest in the economic data over the next few months, which will show an indication of how robust the recovery is after April’s sales tax hike.
Chinese markets continued to shrug off ongoing concerns surrounding the financial sector. Meanwhile, new Indian PM Narendra Modi continued his busy first week in office, announcing his 10-point plan ahead of GDP figures for the first quarter due later on in the session.
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