News / Analysis
Finance Update – A return to “normal”May 5, 2020
Asian markets this morning were generally in the green, 0 growth in China and only the Nikkei and Kospi at 2.84% and 2.68%, respectively, in the red.
The Australian dollar overnight added a half percent on the central bank’s decision to maintain a quarter percent interest rate and despite underperforming service and composite PMIs for April. Following the announcement, Treasurer Josh Frydenberg told reporters that he saw no reason to increase financial support for the economy.
As economies begin to emerge from their Covid-enforced lockdowns, Germany is challenging the ECB’s right to purchase government bonds – their most effective tool in averting a crisis during the pandemic.
Meanwhile, the EC has approved a €7 bn state-aid bill for Air France, and Germany is on the road for a similar deal with the German government.
European markets lost on average 3% yesterday, the CAC40 leading with a 4.24% contraction, the FTSE bringing up the rear at 0.16%.
April’s Manufacturing PMIs disappointed traders yesterday in France and the EU Germany and Italy’s results came in better than expected, and the Euro lost 3/10 of a percent overnight. And with UK-US trade talks set to begin today, the US-Britain Chamber of Commerce yesterday urged the British government to conclude its bilateral talks with the EU before attempting to negotiate a deal with the US.
Reuters reports that car sales throughout the isles fell by 97% in April – their lowest since February 1946, while the Confederation of British Industry expects SMEs to experience a 30-year record drop in output
The Nasdaq yesterday added 1.23%, stemming a 40-day drop.
Factory orders in March, courtesy of the US Census Bureau show a worse-than-expected 10.3% contraction. T
he Treasury Department yesterday announced it would need to borrow about $3 tn during this year’s second quarter – more than an entire fiscal year, usually.
Good news for oil producers, as WTI finally crossed above the $20 mark overnight as economies begin to emerge from lockdown and the travel industry looks rosily ahead.
Gold lost another half percent and is currently forming a pendant towards 1704, and Bitcoin continues to trend as it tries to maintain a foothold just above the 9K mark.
Ahead of its next halving, CoinDesk reports an abnormal drop in block-making times. Halving refers to the pace of new bitcoin token-creation – the result of halving the number of Bitcoins awarded per block creation by a miner – and take place roughly every 4 years.
US airline stocks took a plunge yesterday after Warren Buffet’s Berkshire Hathaway sold its entire airline portfolio.
Intel yesterday announced its purchase of the Moovit public transport app, reports Reuters, for nearly a billion dollars, for integration into its Mobileye warning device, all part of its endeavour to develop robot taxis – expected to be launched early next year. The app is currently used by over 800 million users in 102 countries.
Apple shares rose by 1.4% as it completed an $8bn bond issuance, as reported by CNBC; and Ferrari added 5% on a better-than-expected earnings report for Q1. At $30.43bn, the company’s market cap now surpasses Ford.
|08:30 AM GMT||UK||Markit Services PMI|
|09:00 AM GMT||EU||PPIs & EC’s growth forecast|
|12:30 PM GMT||US||Trade Balance. Services & Composite PMIs at 12:55. ISM Manufacturing PMI & employment at 14:00|
|20:30 PM GMT||OIL||API Weekly Crude Oil Inventories|
|21:45 PM GMT||NZ||Labour costs. Unemployment & participation rate at 22:45|
|11:30 AM GMT (+1)||Australia||Retail sales|
|06:00 AM GMT (+1)||Germany||Factory Orders|