EU Daily Market Wrap - 26th April 2019

EU Daily Market Wrap - 26th April 2019


Today's Highlights

  • US GDP soars above estimates but questions remain while Core PCE missed

  • Trump said to have called OPEC to bring Oil prices down


Macro Review...

This week concludes with another tricky day of trading in the markets that saw the release of a mixed US GDP release, with US output growth smashing estimates at 3.2% - against 2% expected -  and was the highest Q1 GDP since 2015. However, the Core PPI component showed significant signs of weakens with a print of 0.6% vs 1.3%.


The breakdown of bottom line GDP shows the rise in inventories and narrowing of trade deficit as main contributors to the positive figure. However, internal demand factors like house spending printed the weakest quarter in five years, rising deflationary risk and maybe giving some more headaches to the FED.



Global equities traded mixed, with US Indices diverging from the positive performance in Europe and Asia. Choppy reaction from Wall Street after the release of US GDP as the data shades some doubt over the FED reaction function. SP500 traded flat, whereas DAX was slightly positive at the close.


The FX space was mainly led by US Dollar weakness as the GDP data highlighted deflationary pressure on domestic prices. The reaction saw all major dollar counterparts pulling back form their previous lows. EUR jumped back above the 1.1200 level after a quick drop at the release of US data. All other G10 pairs followed similar patters with the Kiwi and Aussie dollar being the main out performer for the session. GBP remained below the 1.3000 mark after a bounce from the 1.2900 level which was also the low from Feb 2019.

Just looking over the commodity complex, quite day for Crude Oil today, which rapidly pulled back from recent highs retesting the 62.50 level to the downside. Gold confirmed the break back above the 1280 level that we had yesterday, amid US Dollar weakness and mild risk-off tone at the open of Wall Street.


EU close...



If you missed the morning briefing from the desk click HERE

Hope you enjoyed the session and I wish you all a great weekend.


Tommaso

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