Markets Emerge from FOMC Announcement and Biden Speech on Up Note

April 29, 2021

U.S. stock futures point to a higher open. Share prices closed up 0.8% in Hong Kong, 0.6% in Indonesia, and 0.5% in China. Equities are somewhat higher in many European centers but not Germany. Japan is observing Showa Day.

Although still near a 2-month low, the weighted DXY dollar index is trading near the top of its overnight range. The dollar climbed 0.3% against the yen and 0.1% relative to the Mexican peso and both Australian and New Zealand dollars but is flat versus the Swiss franc and sterling and down 0.2% relative to the Turkish lira and Chinese yuan.

Ten-year sovereign debt yields are up 4 basis points in the U.S., 3 bps in the U.K., and 2 bps in Germany. West Texas Intermediate crude oil strengthened 1.1% overnight.

U.S. 1Q GDP data will be released at 08:30 EDT.

Economic sentiment in Euroland rose more than forecast to a 31-month high of 110.3 in April from readings of 100.9 in March and 93.4 in February. Industrial sentiment reached a record high, and sentiment also improved in services, construction, retail, and among consumers.

M3 money growth in the euro area slowed last month by 2.1 percentage points to a 10.1% on-year pace. Bank credit growth slowed too. M3 in the first quarter was 11.6% higher than a year earlier.

Positive GDP growth resumed last quarter in Sweden as a pace that was double analyst expectations. GDP was 1.1% greater than in 4Q 2020 and unchanged from a year earlier versus on-year drops of 2.2% in 4Q and 7.7% in 3Q 2020. Business confidence and consumer sentiment in Sweden improved in April to its best levels in 121 and 31 months, respectively.

Greek producer price inflation shot up to 9.1% in March from zero percent in February and -8.0% at the end of 2020. Greek business confidence and consumer sentiment in April improved to 14- and 10-month highs. But retail sales in February were 1.8% lower than a year earlier, marking their fourth consecutive year-on-year drop.

Belgian GDP rose 0.6% on quarter and recorded a smaller 1.0% year-on-year drop in the first quarter.

Dutch business confidence improved to a 2-year high this month.

Spanish CPI inflation accelerated more than forecast to a 30-month high of 2.2% in April. The Spanish jobless rate remained elevated at 15.98% last quarter.

Belgian CPI inflation climbed to a 14-month high of 1.2% in April.

In Singapore, producer price inflation swung from -0.7% in February to +9.6% last month.

Italian PPI inflation increased two percentage points to a 2-year high of 2.7% last month.

South African PPI inflation rose 1.2 percentage points to a 33-month high of 5.2% in March.

Australian import prices rose last quarter for the first time in five quarters, cutting their year-on-year decline to 6.2%.

German import price inflation jumped to 6.9% in March from 1.4% in February and minus 7.4% in April 2020. Energy costs were 57% greater than a year earlier. A surprising 9K rise in the number of unemployed German workers was also reported today.

Business confidence in South Korea soared to its best level in 126 months in April.

Copyright 2021, Larry Greenberg. All rights reserved. No secondary distribution without express permission.


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