US stock markets on Tuesday continued their recovery from the slump at the end of last week, but trading remained volatile. The Dow Jones Industrial closed at 33'128.79 points +0.20% higher than the previous day and the S&P 500 gained nearly half a percent to 4'175.48 points. Before tonight's expected interest rate decision by the Federal Reserve (Fed), investors are now likely to hold back. On the bond market, the yield on ten-year US government securities remained stable just below 3%. With the anticipated further and probably significant interest rate hike of 50 basis points and the foreseeable reduction of the bloated central bank balance sheet, the US central bank will finally leave the era of ultra-cheap money behind. The decision will be made tonight at 20:00 (CET), followed by the highly anticipated press conference of Fed Chairman Jerome Powell at 20:30.
On the earnings season side, Pfizer, among others, delivered solid quarterly results. The Covid-19 vaccine and the pill “Paxlovid” against a severe course of corona disease provided a profit and sales increase above market expectations.
The Reserve Bank of Australia's (RBA) yesterday raised its key interest rate for the first time since the outbreak of the corona pandemic. With a rate hike of 25 basis points, the key rate is now +0.35%. Analysts had expected a rate hike, but the majority anticipated a more moderate move of 15 basis points. In view of the increasing inflationary pressure worldwide, the RBA also held out the prospect of further monetary tightening.
EU countries are to stop importing Russian oil in the future, according to a proposal by the EU Commission. This is to be part of a new sanctions package against Russia, which is to be presented today in Brussels. To facilitate the renunciation for some EU countries (most likely Hungary and Slovakia) with high dependency, transition periods of six to eight months are to apply. In addition to the oil embargo, the sanctions are to include new punitive measures against companies such as Sberbank, Russia's largest bank. However, implementation of the new sanctions requires the approval of all 27 EU member states.
Price increases at producer level continued to rise in the eurozone countries in March. Producer prices rose at a record pace of +36.8% year-on-year. Energy cost more than twice as much as a year ago. In addition to the Ukraine war, the effects of the Corona lockdowns in China are also causing ongoing disruptions to global supply chains, making many goods more expensive. Developments in producer prices are having a delayed impact on consumer prices in some cases. The sharp rise in producer and consumer prices is putting the European Central Bank (ECB) nder increasing pressure to tighten its monetary policy.
In the euro area, the official unemployment rate reached 6.8% in March (previous month 6.9%), the lowest level since the introduction of the euro. A year ago, the unemployment rate was 8.2%, which means that unemployment has fallen by 1.93 million over the year. The unemployment rate in the eurozone reached its highest level to date in the wake of the euro crisis, at 12%.
|08:00||GE||Exports (March, m/m)||+6.4%|
|08:00||GE||Imports (March, m/m)||+4.5%|
|09:45||IT||PMI Composite (April)||52.1|
|09:50||FR||PMI Composite (April)||57.5|
|09:55||GE||PMI Composite (April)||54.5|
|10:00||EZ||PMI Composite (April)||55.8|
|11:00||EZ||Retail Sales (March, m/m)||+0.3%|
|14:15||US||ADP Employment private sector||455,000|
|14:30||US||Trade Balance (March)||USD -89.2bn|
|15:45||US||PMI Composite (April)||55.1|
|16:00||US||ISM PMI Non-Manufacturing (April)||58.3|
|20:00||US||FOMC Monetary Policy Announcement||+0.5%|
|20:30||US||Fed Press Conference|
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Editor: Alessandro Fezzi, E-Mail: firstname.lastname@example.org
Source: LGT Bank (Switzerland) Ltd.
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