Will US Payrolls provide a reason for Fed to cut rates this summer?
EU mid-market update: Will US payrolls provide a reason for Fed to cut rates this summer? Apple earnings overshadowed by colossal buyback.
Notes/Observations
- Norway Central Bank (Norges) with a hawkish hold as statement notes rates to be maintained ‘for quite some time’. Macro focus pivots to US nonfarm payrolls, unemployment and avg hourly earnings. A weak reading would give Fed cause to cut rates soon, but strong data so far in 2024 has continually pushed the timing back.
- Market hours remain disrupted with Japan and China closed today. UK to be closed on Mon. FX space takes a breather after two separate BOJ interventions on the yen earlier in the week.
- Apple’s knockout $110B share buyback is grabbing attention as the largest in US history. Company promises big plans for AI development soon.
- US upcoming premarket earnings: CBRE, Fluor, Hershey, Magna, Owens & Minor, Trimble
- Asia partial close with Hang Seng outperforming at +1.4%. EU indices are +0.3-0.5%. US futures are +0.3-0.7%. Gold -0.1%, DXY -0.1%; Commodity: Brent +0.2%, WTI +0.2%; Crypto: BTC +2.4%, ETH +1.0%.
Asia
- Australia Apr Final PMI Services: 53.6 v 54.2 prelim (confirms 3rd month of expansion).
Europe
- ECB’s Lane (Ireland, chief economist) reiterated Council stance that would not pre-commit to a particular rate path. Should accumulate data between decisions.
- ECB's Stournaras (Greece, dove) now saw 3 rate cuts this year as more likely (down from his prior forecast of 4 cuts).
Americas
- US Treasury Sec Yellen said to deliver "major address" at Sedona Forum on May 3.
- Moodys affirms Canada sovereign rating at Aaa; Outlook Stable.
Speakers/fixed income/FX/commodities/erratum
Equities
Indices [Stoxx600 +0.29% at 504.64, FTSE +0.34% at 8,200.16, DAX +0.30% at 17,958.65, CAC-40 +0.48% at 7,952.72, IBEX-35 0.00% at 10,872.50, FTSE MIB +0.26% at 33,825.00, SMI +0.32% at 11,245.81, S&P 500 Futures +0.34%].
Market focal points/key themes: European indices open higher across the board, but lost some of the impetus through the early hours of trading; Greece, Poland and Cyprus closed for holiday; sectors leading to the upside include financials and technology; among lagging sectors are consumer discretionary; banking subsector supported following Credit Agricole results; reportedly Bain Capital interested in Atos’ assets; reportedly Glencore studying rival bid for Anglo American; focus on US NFP to be released later in the day; earnings expected in the upcoming Americas session include Hershey, Berkshire Hathaway, Cheniere Energy and Magna.
Equities
- Consumer discretionary: InterContinental Hotels Group [IHG.UK] -1.0% (trading update), JC Decaux [DEC.FR] +11.5% (earnings, post close) - Consumer staples: Diageo [DGE.UK] +1.5% (new CFO) - Energy: Siemens Energy [ENR.DE] +1.0% (analyst action) - Financials: Societe Generale [GLE.FR] +5.5% (earnings), Credit Agricole [ACA.FR] +4.0% (earnings), AXA [AXA.DE] -1.5% (earnings).
- Healthcare: Novo Nordisk [NOVOB.DK] -4.0% (Amgen’s comments on its experimental obesity drug), ALK-Abello [ALKB.DK] +15.0% (earnings, raised guidance) - Industrials: Henkel [HEN.DE] +4.5% (raises outlook), Daimler Truck [DTG.DE] -5.5% (earnings), Mondi [MNDI.UK] -1.0% (trading update).
- Materials: Anglo American [AAL.UK] +3.0%, Glencore [GLEN.UK] -2.0% (speculation of Anglo bid from Glencore).
Speakers
- Norway Central Bank Policy Statement reiterated stance that policy rate would likely be kept at current level for some time ahead and added that it might be needed somewhat longer. Rate was sufficiently high to return inflation to target within a reasonable time horizon. Price inflation was slowing but was still markedly above target. Economic outlook was uncertain.
Economic data
- (FI) Finland Mar House Price Index M/M: 1.7% v 1.1% prior; Y/Y: -4.0% v -5.8% prior.
- (FR) France Mar Industrial Production M/M: -0.3% v +0.3%e; Y/Y: 0.7% v 1.4%e.
- (FR) France Mar Manufacturing Production M/M: -0.5% v +0.2%e; Y/Y: % v 1.2%e.
- (FR) France Mar YTD Budget Balance: -€52.8B v -€44.0B prior.
- (TR) Turkey Apr CPI M/M: 3.2% v 3.4%e; Y/Y: 69.8% v 70.1%e; CPI Core Index Y/Y: 75.8% v 75.7%e.
- (TR) Turkey Apr PPI M/M:3.6 % v 3.3% prior; Y/Y: 55.7% v 51.5% prior.
- (TH) Thailand Apr Foreign Reserves w/e Apr 26th: $221.5B v $221.3B prior.
- (NO) Norway Central Bank (Norges) left Deposit Rate unchanged at 4.50% (as expected).
- (IT) Italy Mar Unemployment Rate: % v 7.5%e.
- (RU) Russia Narrow Money Supply w/e Apr 26th (RUB): 18.24T v 18.26T prior.
- (UN) FAO Apr World Food Price Index: 119.1 v 118.3 prior.
- (NO) Norway Apr Unemployment Rate: 1.9% v 1.9%e; Unemployment Rate (unadj): 2.0 v 2.0% prior.
- (UK) Apr Final Services PMI: 55.0 v 54.9 prelim; Composite PMI: 54.1 v 54.0 prelim.
- (UK) Apr Official Reserves Changes: $0.0B v $2.3B prior.
- (HK) Hong Kong Mar Retail Sales Value Y/Y: -7.0% v 0.9%e; Retail Sales Volume Y/Y: -8.6% v -3.6%e.
- (EU) Euro Zone Mar Unemployment Rate: 6.5% v 6.5%e.
- (BE) Belgium Mar Unemployment Rate: 5.5% v 5.5% prior.
Fixed income issuance
- (IN) India sold total INR280B vs. INR280B indicated in 2026, 2039 and 2064 bonds.
Looking ahead
- 05:25 (EU) Daily ECB Liquidity Stats.
- 05:30 (IN) India to sell combined INR280B in 20226, 2039 and 2064 bonds.
- 05:30 (ZA) South Africa to sell combined ZAR1.0B in I/L 2031, 2038 and 2050 Bonds.
- 06:00 (IE) Ireland Apr Live Register Monthly Change: No est v -0.4K prior; Live Register Level: No est v 174.5K prior.
- 06:00 (UK) DMO to sell £6.0B in 1-month, 3-month and 6-month bills (£0.5B, 2.0£B and £3.5B respectively).
- 06:00 (BE) Belgium Debt Agency (BDA) to sell Bonds through Ori Auction.
- 07:30 (BR) Brazil Mar Total Outstanding Loans (BRL): No est v 5.797T prior; M/M: No est v 0.2% prior; Personal Loan Default Rate: No est v 5.5% prior.
- 07:30 (IN) India Forex Reserve w/e Apr 26th: No est v $640.3B prior.
- 08:00 (IN) India announces upcoming bill issuance (held on Wed).
- 08:00 (BR) Brazil Mar Industrial Production M/M: +1.3%e v -0.3% prior; Y/Y: -2.4%e v +5.0% prior.
- 08:00 (MX) Mexico Feb Gross Fixed Investment M/M: -0.1%e v +0.1% prior; Y/Y: 12.7%e v 15.3% prior; Private Consumption Y/Y: 5.2%e v 2.9% prior.
- 08:00 (MX) Mexico Mar Leading Indicators M/M: No est v 0.15 prior.
- 08:00 (MX) Mexico Apr Vehicle Domestic Sales: No est v 124.3K prior.
- 08:00 (ES) Spain Debt Agency (Tesoro) announcement on upcoming bond issuance.
- 08:30 (US) Apr Change in Nonfarm Payrolls: +241Ke v +303K prior; Private Payrolls: +190Ke v +232K prior; Change in Manufacturing Payrolls: +5Ke v 0K prior.
- 08:30 (US) Apr Unemployment Rate 3.8%e v 3.8% prior; Underemployment Rate: No est v 7.3% prior; Labor Force Participation Rate: No est v 62.7% prior.
- 08:30 (US) Apr Average Hourly Earnings M/M: 0.3%e v 0.3% prior; Y/Y: 4.0%e v 4.1% prior; Average Weekly Hours: 34.4e v 34.4 prior.
- 09:30 (CA) Canada Apr Services PMI: No est v 46.4 prior; Composite PMI: No est v 47.0 prior.
- 09:45 (US) Apr Final S&P Services PMI: 51.0e v 50.9 prelim; Composite PMI: 51.0e v 50.9 prelim.
- 10:00 (US) Apr ISM Services Index: 52.0e v 51.4 prior; Prices Paid: 54.9e v 53.4 prior.
- 13:00 (US) Weekly Baker Hughes Rig Count.
- 19:45 (UD) Fed's Goolsbee participates on Panel.
- (CO) Colombia Quarterly Monetary Policy Report.
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