News / Analysis
Finance Update – Euro Data Deluge AheadJune 3, 2020
China Services Soar
Asian indexes are all up this morning, led by the KOSPI’s 2.96%. Markets across the globe are rising, resulting in a weakening of all safehaven assets, including the Yen and the USD.
Japan’s services Business Activity index improved by 5 points in May to 26.5, while the composite figure rose 2 points to 27.8.
Australia’s CBA PMIs improved in May – services up to 26.9 and the composite up to 28.1. Building permits contracted by 1.8% MoM in April – much better than the 15% contraction expected, while the Q1 GDP contracted by 0.3% QoQ.
China this morning surprised with a much-improved services PMI – 55 in May on April’s 44.4. A US Chamber of Commerce survey reports that 53% of US businesses operating in Hong Kong are concerned that national security legislation there could hamper their operations.
Johnson to Fight HK Legislation
The Swiss Franc has yet to react to this morning’s reported 2.6% reduction in Q1 GDP QoQ.
European indexes were led up yesterday by the DAX’s 3.75% rise. Most other markers were in the 2% region, save the FTSE, which lagged with a paltry 0.87%.
UK PM Johnson this morning published an op-ed in the China Morning Post stating that he would change the country’s immigration laws in response to the enactment of Chinese security laws in Hong Kong – a transgression on the Joint Declaration of 1984. The change would open the gate for about 3 million Hong Kong residents to immigrate to the UK.
Also on the Isle, UK consumer credit plunged to £-7.4 B in April alongside mortgage approvals, which fell by ¾ to 15.8K, as the BRC’s shop price index contracted by 2.4% – 1/3 worse than in March. Elsewhere in Europe, IFO reports an improvement in German carmaker sentiments vis-à-vis recovering exports.
Fires Leave Markets Unfazed
Despite unrest in the streets, the DOW yesterday led US indexes up with a 1% increase. The Redbook Index contracted a further ¼%, while ISM’s NY Business conditions index improved to 19.4 points – more than 4 times the April figure.
In an apparent dig at the US president, following Angela Merkel’s refusal to attend his proposed G7 meeting in the US, the organization has decided to hold a teleconference on the corona battle.
API Drawdown Pushes Oil
Oil overnight added another 2.31% following the API’s report of an 0.481 mB drawdown in Cushing Oklahoma.
In a blow to OPEC+, US President Trump has expressed trust in the organization set to meet this week to finalize additional production cuts.
Reuters reports that the American leader Tuesday threatened Saudi Arabia’s Prince Mohamed Bin Salman that without the cuts, US troops may have to withdraw from the kingdom.
Google Faces $5bn Lawsuit
Volkswagen, Daimler and BMW shares rose by 5% yesterday, and Renault another 3%, all on hopes of government stimulus, this as, Lufthansa – itself a projected recipient of about €9 bn in aid – reported yesterday a €2.1bn loss in this year’s Q1 on a 26% reduction in passenger traffic YoY.
Conversely, Zoom has doubled expected annual sales in its latest report to $1.8bn, however warns that expenses are also rising – especially increased data and bandwidth for hosting increased traffic.
Meanwhile, Google faces a $5bn class suit for invading the privacy of users by tracking their internet usage. The company will be holding a general shareholders meeting later today.
And in a conference call with employees, Facebook’s Zuckerberg continues to defend his position of not removing Trump’s inflammatory posts.
|07:45-09:00 AM GMT||Spain, Italy, France, Germany & EU||Markit Services & Composite PMIs. German unemployment at 07:55 and Italy’s at 8. EU PPIs and Unemployment at 9.|
|08:30 AM GMT||UK||Services PMI|
|11:00 AM GMT||US||Mortgage Applications. ADP Employment change at 12:15. Markit PMIs at 1:45. ISM PMIs & factory orders at 2|
|02:00 PM GMT||Canada||BoC Interest rate & statement.|
|02:30 PM GMT||OIL||EIA Crude Oil Stocks Change|
|01:00 AM GMT (+1)||Australia||New Home Sales, Retail sales & Trade Balance.|