Morning bid: China trade heats up, UK rates in view
Send a link to a friend
[May 09, 2024] A
look at the day ahead in U.S. and global markets from Mike Dolan
As Wall Street stalls its recent rally, world markets switched attention
to China's on-off recovery and whether the Bank of England's latest
policy decision on Thursday may signal that it is ready to ease credit
as early as next month.
U.S. stock futures as well as Asian and European equities have turned
more subdued generally. But Chinese stocks clearly outperformed
overnight after news the country's exports and imports returned to
growth in April - stirring hopes that government stimulus measures there
may be starting to kick in.
Shipments from China grew 1.5% in the year through last month, while
imports for April increased by 8.4%, beating an expected 4.8% rise. Both
imports and exports reversed March declines.
The trade numbers add a spur to the global demand outlook at the margin
at a tricky time for central banks - nudging oil prices higher again on
Thursday alongside data showing a surprise draw on U.S. stockpiles.
But they also likely mask significant upheaval in bilateral trade flows.
Reuters' calculations based on official data from the German statistics
office, for example, showed the United States overtook China as
Germany's most important trading partner in the first quarter of this
year.
Adding to the Chinese market cheer on Thursday, however, was some
loosening of property market curbs. China's eastern metropolis of
Hangzhou said it would lift all home purchase restrictions to shore up
its real estate market, raising the prospect of other cities following
suit.
The latest development also comes against an intensified tech sector
standoff between Washington and Beijing.
U.S. Commerce Secretary Gina Raimondo said on Wednesday a Chinese
invasion of Taiwan and seizure of chips producer TSMC would be
"absolutely devastating" to the American economy. Declining to comment
on how or whether it would happen, she told a U.S. House hearing that
the United States buys 92% of its leading edge chips from TSMC.
Intel, meanwhile, fell more than 2% on Wednesday after warning of a
sales hit from the U.S. revoking some of the chipmaker's export licences
for China.
It has been a bumpy week within the tech sector more generally. Arm
Holdings dropped 10% in out-of-hours trade overnight after a full-year
revenue forecast missed expectations.
Wall St stock futures were off slightly ahead of Thursday's open,
Treasury yields were a touch higher and the dollar was firmer too.
[to top of second column] |
Cars travel past a display showing Shanghai and Shenzhen stock
indexes near the Shanghai Tower and other skyscrapers at the
Lujiazui financial district in Shanghai, China February 5, 2024.
REUTERS/Xihao Jiang/File Photo
Wednesday's 10-year Treasury auction was a little tepid and bond
investors now await $25 billion of new 30-year bonds later on
Thursday.
Fed officials continue to sound cautious - though downplaying any
need to raise interest rates again. Boston Fed President Susan
Collins said the current setting of monetary policy would slow the
economy in the way she said was necessary to get inflation back to
the Fed's 2% target.
Back in Europe, the Bank of England decision is in focus and
sterling is on the backfoot amid speculation that steady rates today
may be accompanied by signals that the Bank is prepared to ease
alongside the European Central Bank as soon as next month.
And in deals, Spanish bank Sabadell jumped 6% after rival BBVA
presented a 12.23 billion euro takeover bid directly to
shareholders, even though the former's board already rejected the
proposal. BBVA shares were down 5.4%.
Key diary items that may provide direction to U.S. markets later on
Thursday:
* Bank of England policy decision, meeting minutes, monetary policy
report and press briefing; Central Bank of Mexico releases Monetary
policy statement
* US weekly jobless claims, Mexico April inflation
* San Francisco Federal Reserve Bank President Mary Daly speaks;
European Central Bank board member Luis de Guindos speaks
* US corporate earnings: Warner Bros Discovery, Tapestry,
Constellation Energy, Evergy, Viatris, Gen Digital, Insulet, Epam
Systems, Akamai Technologies, Mettler-Toledo, Charles River
Laboratories
* Turkey's President Tayyip Erdogan visits the United States
* US Treasury auctions $25 billion of 30-year bonds
(By Mike Dolan, editing by Gareth Jones mike.dolan@thomsonreuters.com)
[© 2024 Thomson Reuters. All rights
reserved.]
This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content. |