EU Daily Market Wrap - 15th May 2019

EU Daily Market Wrap - 15th May 2019

Today's Highlights

  • CN Industrial Production and Retail Sales disappoint

  • US Retail Sales Growth and Industrial Production fall in April

  • Italian Deputy PM Salvini will break EU fiscal rules to decrease unemployment

  • Trump plans to delay tariffs on Auto Imports

  • Oil spikes after DoE highlighted smaller builds

Macro Review

We went from a risk-off morning session to a full-power risk-on afternoon with Global Equities recovering after the negative sentiment that followed the release of weaker then expected Chinese data in April. The CN Industrial Production slumped to 5.4% vs 6.5% expected down from the previous month, whereas CN Retail Sales came out at 7.2% vs 8.6% consensus, extending the recent negative trend. Following the negative finish in the Asia-Pac region, European and US Indices went under pressure, with USD lifted by safe heavens inflows. The EUR faced losses also led by rumours of Italy heading towards a snap election in case of a Government coalition breakdown.

The afternoon turned into a completely different story amid weaker than expected US Retail Sales in April (-0.2% vs 0.2% exp) and Trump's plan to delay tariffs on Auto imports which led to gains in US and European Equities and a sharp rebound in EUR. 

US Equities finished positive after a strong rebound following Trump remarks on delaying tariffs on cars and a softer tone towards China. Positive sentiment, reverberated also over Europe where all major indexes closed in green led by a positive performance in Industrial Large-Caps. 

The FX space was mainly dominated by a firmer dollar with EUR settling above the 1.12 level after a volatile session and GBP bottoming out just above the 1.2800 handle. The rest of G10 currencies followed similar patterns with JPY remaining around its weekly highs. Just a thought on EUR, which despite its renewed resilience still maintains a negative outlook give the return of Italian instability and the strength in the USD - which is a direct consequence of the weakness in EM market currencies. 

Crude Oil finished slightly higher after the release of the weekly DoEs data amid smaller builds than previously reported in the API's data.

Gold traded sideways amid a mixed USD Dollar and risk appetite.

The Day Ahead

  • AUD jobs data (overnight)

  • Eurogroup Meeting (throughout the day)

EU Close

Hope you enjoyed the session.

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