German CPI ticked marginally higher in provisional April data, rising to 2.4% y/y from 2.3% in March, with the increase largely driven by energy prices. On a month-on-month basis CPI rose 0.6%, for the third consecutive month. Eurozone-wide inflation is due to be released today, with consensus expectations for the pace of price growth to remain unchanged from March, at 2.4% y/y in April.
Eurozone business confidence fell in April, declining to a value of 95.6 from 96.2 in March. The decline in business sentiment was broad based across sectors. On a country-basis, the business confidence measure fell in Germany, Italy and France, but rose in Spain.
The official Chinese composite PMI reading fell to 51.7 in April from 52.7 in March but remained above the neutral-50 mark, signaling a continued expansion in private sector activity. A similar story played out in both the non-manufacturing and manufacturing sub-components, with both measures declining from their March values but remaining above 50. With a value of 50.4 in April (falling marginally from 50.8), the second consecutive above-50 reading in the manufacturing sub-component will spur hope of a more sustained recovery in China. The unofficial Caixin manufacturing PMI also remained in expansionary territory, rising to 51.4 in April from 51.1 in March.
Today’s Economic Data and Events
- 13:00 EC CPI (Apr). Forecast: 2.4% y/y
- 13:00 EC GDP (Q1). Forecast: 0.1% q/q
Fixed Income
- US treasury yields fell again on Monday, with the 2yr closing the day 2bps lower at 4.9767% and the 10yr falling 5bps to reach 4.6136%.
- Yields on major European bonds were also broadly lower on Monday. The UK 10Yr gilt yield fell 3bps to reach 4.2915%, while the 10yr bund yield dropped 4bps to 2.532%.
- Reports suggest ADQ, Abu Dhabi’s sovereign wealth fund, is planning on issuing dollar bonds at 5- and 10-year maturities.
FX
- The US dollar fell against a basket of peer currencies on Monday, with the dollar spot index declining 0.34%. EURUSD gained 0.26% to 1.0721 and GBPUSD rose 0.56% to 1.2563. The Japanese Yen advanced 1.25% to reach 156.35, with speculation rising that authorities intervened in currency markets.
- Commodity currencies gained against the dollar on the day. AUDUSD rose 0.52% to 0.6567, NZDUSD gained 0.64% to 0.5978, and USDCAD fell 0.07% to 1.3661.
Equities
- US equity indices gained on Monday, with strong earnings results outweighing investor concerns about Wednesday’s upcoming Fed decision. The S&P 500 rose 0.32%, the NASDAQ gained 0.35%, and the Dow Jones increased by 0.38%.
- European equities, in contrast fared worse on Monday. The Eurostoxx 50 fell 0.51%, the CAC 40 declined by 0.3% and the DAX fell 0.24%. The FTSE 100 rose only marginally, adding 0.09%.
- Locally, the DFM gained 0.3% while the ADX rose 0.35% on Monday.
Commodities
- Oil prices fell back on Monday, amid signs of hope of a de-escalation in geo-political tensions. Brent futures dropped 1.23% to USD 88.4/b, while WTI declined by 1.45% to USD 82.63/b.