European
The EU leaders continue to push through to tackle major issues in the region that suffers still from anemic growth and uncertain outlook as the euro area debt crisis takes a toll on the region’s entire 27 economy. The EU summit on Wednesday focused on tax evasion and means to improve the taxation system.
In the EU according to statistics tax evasion and avoidance cost for the EU 27 is nearly 1 trillion euros a year. A European Parliament resolution on tax evasion Tuesday urged the leaders to halve the trillion annual losses by 2020 by curbing the loopholes and havens.
The EU leaders stressed on the need to tackle tax evasion and at the same time push for global action against bank secrecy; the key is also to prevent firms from taking advantage of loopholes to avoid taxes.
At the ...
The Euro area’s recession have likely dragged on into a seven consecutive quarter in the second quarter of 2013, though the rate of contraction eased for the second straight month, according to Markit flash estimate for May.
The latest release of the Purchasing Managers’ Index (PMI) survey signaled today an ongoing recession in the second quarter, with a flash Eurozone PMI Composite at 47.7, up from 46.9 in April and topping analysts’ median estimate of 47.2.
The downturn remained broad based, said Markit. However contraction in both manufacturing and service sectors continues to bottom out, with the Manufacturing PMI rising to 47.8 from 46.7 in April, while Services PMI at 47.5, up from 47.5.
Private sector output in the four-largest economies of the euro is still in contraction, ...
European shares kick started the session in red on Thursday session with a poor factory activity survey from China along with concerns the U.S. Federal Reserve may end its asset-purchasing program sooner than expected.
- Benchmark STOXX Europe 600 dropped 1.74% to 305.18
- STOXX 50 fell 2.14% to 2,774.36
Shares in European markets dropped sharply on Thursday mirroring the drop in Asian shares after HSBC`s preliminary survey of purchasing managers showed China`s manufacturing activity shrank for the first time in seven months in May, raising concerns over the recovery in the world`s second-largest economy.
Chinese flash manufacturing purchasing managers’ index reading fell to 49.6 in May, compared with a previous reading and analysts’ expectations of 50.4.
In Europe, PMI data from the ...
Doubts over the strength of recovery in the world`s second-biggest oil consumer and the rise in U.S. gasoline weighed on oil prices on Thursday. Meanwhile, as the U.S. central bank is divided on when it may start to pull back its stimulus the dollar rose.
Manufacturing in China shrank in May for the first time in seven months to 49.6, reflecting slower domestic demand which is unable to offset softer demand from the United States and the European Union, darkening the outlook for demand on oil.
Moreover, data from the Energy Information Agency showed that gasoline stockpiles in the U.S. rose 3 million barrels last week to 220 million, near the highest for this time of year since 1999, sparking expectations of a drop in prices, unless demand picks up.
- Crude is trading around $93.23 a ...
European stocks rose to a new five-year high on Wednesday, backed up by Federal Reserve Chairman Ben Bernanke’s statement that the Fed would retain its monetary stimulus until the economic improves.
The Stoxx Europe 600 Index added around 0.2 percent to 310.59 today. The equity benchmark closed at the highest level since June 2008 yesterday. The gauge has rallied 96 percent since March 2009 as European Central Bank President Mario Draghi pledged to preserve the euro and the Fed embarked on three rounds of stimulus.
STOXX 600 ended higher today by 0.19% at 310.59; STOXX 50 ended also in green, higher by 0.47% at 2835.01.
CAC 40 Index
The French benchmark index ended in the green today to settle at 4051.11, higher by 14.93 points or 0.37%. The index opened at 4035.43 recording a high ...
European Market Update
UK retail sales data comes in negative and well expectations; markets ahead Bernanke testimony for hints of QE tapering
Notes/Observations
Bank of Japan (BoJ) leaves policy unchanged (as expected). Upgrades economic outlook for 5th straight month
Japan Apr trade deficit worse than expected but smallest deficit in three months
Australia consumer confidence sees biggest drop in 17 months
USD corrects from recent strength as markets might have gotten ahead of itself on the debate over tapering of QE
UK retail sales come in negative and below expectations; cold weather blamed
Economic Data
(HU) Hungary Mar Avg Gross Wages Y/Y: 3.2% v 3.0%e
(DK) Denmark May Consumer Confidence: -2.6 v -2.5e
(EU) ECB: €206M borrowed in overnight loan facility vs. €190M prior; € ...
Sunrise Market Commentary
- Rates: Core bonds rebound on technical levels and dovish Fed Bullard
- In a session devoid of key eco releases, core bonds initially continued to move South, approaching key support levels in the US session. Afterwards, dovish comments of Fed Bullard triggered short covering as investors also eyed today's testimony of Bernanke.
- Currencies: Soft Fed speak triggers USD profit taking
- EUR/USD initially drifted south in technical trading yesterday. At the end of the day, soft comments from Fed Bullard pushed EUR/USD north of the 1.29 mark. Sterling was hit as a sharper than expected decline in inflation made markets think that there is still room of maneuver for the incoming BoE governor. EUR/GBP is trading north of 0.8500.
The Sunrise Headlines
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European shares opened mixed on Wednesday session as caution dominated markets ahead of minutes from the Bank of England and the United States Federal Reserve followed by Fed’s Chairman Ben S. Bernanke testimony before the Joint Economic Committee of Congress.
- Benchmark STOXX Europe 600 dropped 0.30 percent or 0.92 points to 309.07
- STOXX 50 fell 0.35 percent or 9.84 points to 2,823.55
Investors will turn their attention to the release of the Federal Open Market Committee minutes later todaym, looking for any signs after FOMC members indicated that they intend to end their 85 billion monthly bond purchases sometime in 2013.
Investors will be eyeing Fed’s Chairman Ben S. Bernanke, as he is scheduled to testify before the Joint Economic Committee of Congress later in the day for ...
Crude oil may extend its losses on Wednesday ahead of Bernanke`s testimony later in the day, as concerns over demand from the world`s top oil consumer were triggered following the unexpected rise in crude stockpiles last week.
Besides the housing and retail sales data set for later in the day from the U.S. and UK, investors are awaiting the U.S. Federal Reserve chief Ben Bernanke`s testimony amid believes the bond-buying stimulus has further to run.
Adding to the downside pressures on oil was the report by the American Petroleum Institute released Tuesday and which showed that U.S. crude oil stockpiles rose by 532,000 barrels last week although inventories were expected to drop.
The U.S. Energy Information Agency (EIA) will release its data on inventories later on Wednesday. The report ...