EU Daily Market Wrap - 14th May 2019

EU Daily Market Wrap - 14th May 2019

Updated: May 15, 2019

Today's Highlights

  • Italian Deputy Prime Minister Salvini "willing to break EU Budget rules

  • US Import, Export Price disappoints

  • UK Polls show Conservative Party at 6th place

  • US-China tensions settles after a ferocious week

Macro Review

The Trade War Cycle seems to be turning towards an ease in tensions as US hints new hope for a deal soon. However, an interesting note out of Deutsche Bank suggested a 60% chance that US-China will not reach a deal in May and tariffs will be imposed on he remaining of Chinese goods. Meanwhile, today US trade data showed US lowest level of Import from China since 2007.

On the European side, Italian Deputy PM Salvini today reiterated his hard stance against the EU fiscal rules being willing to break the 3% Budget/Deficit limit for this year. A bit of over reaction to the downside in EUR as European Election approach and "Lega" losses support in the polls. On the Brexit front, recent surveys now poll the Conservative party at 6th place. which should create further pressure on Theresa May and therefore increasing slightly the chances of her resignation.

Global shares rebounded as Trade tension softens after Trump twitted "Relationships with China are Extraordinary". After the recent sell-off SP500 pairs back some losses bouncing back from the 2800 level. The rest of European indices followed similar patters amid slightly positive tone. However, Chinese equities traded in red still showing signs of weakness.

The US Dollar shoot higher above the 97 level after Salvini remarks weighing on the single currency for the whole session. GBP was the biggest looser amid USD strength as Brexit uncertainty revamps amid Conservative slump in recent polls. AUD closed flat after a choppy session. JPY traded lower as trade tension eases.

Crude jumped back to $62 as Saudi Aramco confirms disruption of two pipelines caused by unidentified drones.

Gold remained around yesterday highs amid trade confusion. 

The Day Ahead

  • CN Industrial Production, Retail Sales, Fixed Asset Investment (overnight)

  • GE GDP (7.00 am)

  • US Retail Sales (1.30 pm)

  • US Industrial/Manufacturing Production (2.15 pm)

EU Close

If you missed the morning briefing from the desk click HERE

Hope you enjoyed the session.

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