Market Overview (05.05.2017)

by Aaron.J | Hans.S | Yilin.Z

Contents 

Market Today 

•  Indices

• Currency

Econ & Policy 

• Economic Indicators

• Policy

Data Center 

• Equity

• Bond

• ETF Flow

Calendar  

• Economic Calendar

Market Today

Indices

S&P 500 (+0.1% at 2,389.52) Dow Jones (0.0% at 20,951) NASDAQ (+0.1% at 6,075) U.S. stocks pared losses Thursday after President Donald Trump mustered just enough votes to pass his repeal of Obamacare, setting the stage for a clash in the Senate.

FTSE 100 (+0.3% at 7,273) U.K. stocks advanced Friday, as oil prices came fighting back from heavy losses, and as a stronger-than-expected jobs report from the U.S. supported expectations for continued growth in the world’s largest economy.

Forex

US Dollar Index (DXY): The dollar trimmed gains against other major currencies on Friday, but was expected to remain supported after the release of upbeat U.S. jobs data, while investors turned their attention to the French presidential vote this weekend. (DXY: 0.14% at 98.92)

EUR/USD:  Although the dollar gained ground after the optimistic Fed stance, increased confidence in the Eurozone political and economic environment has triggered net  gains. (EUR/USD: -0.13% at 1.0916)

British Pounds:The potential positive impact of robust UK data has been offset by a confident Fed statement and expectations of another US rate hike in June. Weaker prices have also undermined Sterling supportand significant headway is unlikely into Friday’s US employment report. (GBP/USD:-0.13% at 1.2923)

Commodities

Gold prices moved higher on Friday, as the U.S. dollar weakened broadly, although the Federal Reserve’shawkish stance this week was expected to limit the precious metal’s gains. Gold prices had tumbled after the Federal Reserveleft  unchangedon Wednesday, as expected, and gave a positive assessment of the U.S. economy,suggesting it was still on track for two more rate hikes this year. (Gold Prices: 0.08%at$1229.6)

U.S. oil prices bounced off asix-month low on Friday, but the commodity remained under pressure amidsustained global supply glut concerns. U.S. drillers last week added rigs forthe 15th week in a row, reaching the highest level since August 2015. Therelentless increase in U.S. output has overshadowed pledged output cuts bymajor producers. In November last year, OPEC and other producers, includingRussia agreed to cut output by about 1.8 million barrels per day betweenJanuary and June, but so far the move has had little impact on inventorylevels.  (BrentCrude Futures:0.39%at $48.59abarrel. WTI Futures:0.33%at $45.66a barrel)

Econ & Policy

Economy

Americas

Average weekly hours were edged higher to 34.4 from 34.3. Average earnings data will continue to be a very important component given the impact on underlying inflation pressures within the economy. Earnings rose 0.3% on the month, although the annual increase was held at 2.5% as the March increase was revised lower.

U.S. unemployment rate hits 10-year low as job creation beats consensus.The  also unexpectedly dropped to 4.4%, from the prior 4.5%. Analysts had expected it torise to 4.6%; U.S. non-farm payrolls 211K vs. 185K forecast from 79K in the preceding month. Unemployment rate wasits lowest level since May 2007.

Atlanta Fedtrims U.S. second-quarter GDP growth view to 4.2 percent as adrop in vehicle sales in April was offset by a rise in inventory in March

US borrowing cost on 30-year mortgages, the most widely held type of U.S. home loan, averaged 4.02 percent in the week endedMay 4, compared with previous week's 4.03 percent, it said. U.S. mortgage ratesheld steady in line with Treasury yields following a weaker-than-forecast figure on first-quarter U.S. economic growth and amid expectations the FederalReserve would leave rates unchanged this week.

Canadianunemployment rate 6.5% vs. 6.7% forecast from 6.7% in the preceding month.

Asia and Pacific

The Australia Industry Group (AiG) performance of construction index climbed to 51.9 April, from 51.2in March, on a scale where 50 separates expansion from contraction. Gains in April were driven by higher new orders and improved business conditions. 

Russian CPI 0.3% vs 0.3% forecast from 0.1% in the preceding month.

Policy

Americas

Next healthcare showdown: The Senate: "Make no mistake: This is a repeal and replace of Obamacare," President Trump said in the Rose Garden after the House passed the American Health Care Act by a slim margin of 217 to 213. The legislation now faces an uphill battle in the Senate, where several Republican members have signaled it could see major revisions. Reports also indicate that the chamber could write its own version of a bill.

U.S.-Mexico trade gap widens: The U.S. trade deficit with Mexico rose to the highest level in nearly a decade in March, posting a gap of $7B, as a weakened peso made goods produced south of the border cheaper for U.S. companies. Despite rallying more than 9% since the start of the year, the peso still has a long way to go in making up for the 17% collapse it suffered over the course of 2016.

Europe

French presidential runoff days away: France will elect its next leader this weekend in the wake of a presidential campaign that has effectively torn up the nation's political status quo. Pollsters still show Emmanuel Macron commanding a big lead over his rival Marine Le Pen, but it all boils down to what happens at the voting booth on Sunday. Whoever ends up in Elysee will determine the next steps for the country and its relationship with the EU.

Middle East and Africa

Syria safe zones shut for U.S.: Russia, Iran and Turkey are setting up four safe zones in Syria that the United Nations described as a promising step to wind down the brutal six-year war. Quoting Russian envoy at Syria peace talks Alexander Lavrentyev, Russian news agencies reported that U.S. and coalition warplanes will not be allowed to fly over the "de-escalation areas."

OPEC losing its grip on crude?: Following a sharp selloff on Thursday amid fears of oversupply, the price of WTI dropped into the $43 handle before finding a floor during Asian trade. U.S. production levels are now not far off top producers Russia and Saudi Arabia. Tumbling prices would likely force OPEC members to extend production cuts later this month, according to analysts, but the prospect of deeper cuts appear slim.

Data Center

Equity

S&P500

VIX

Bond

World Bond Yield Curve

Sovereign Debt Movement

Sovereign 5Y Debt CDS

U.S. Municiple Bond

U.S. Investment Grade Bond

U.S. High Yield Bond

Emerging Market CDS

ETF Flow

Asset Class

Asset Class: Equity

Geography Regions

Geography Regions: Asia Pacific

Calendar

Economic Calender

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