Archives of “May 15, 2019” day

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European shares recover and are closing higher on the day

  
Analysis, Global Indices

German Dax up 0.9%.

The European shares recovered from losing levels earlier and are closing higher on the day. A report that Pres. Trump would delay an auto tariff decision helped to reverse the negative flows.
The provisional closes are showing:
  • German DAX, +0.9%
  • France’s, +0.4%
  • Britain FTSE, +0.6%
  • Spain’s Ibex, +0.5%
  • Italy’s FTSE MIB, the index ended down -0.2% on political concerns

US weekly crude oil inventories +5431K vs -1200K expected

  
Analysis, Crude

Weekly oil inventories from the EIA

  • Prior was -3963K
  • Gasoline -1123K vs -350K exp
  • Distillates +84K vs -719K exp
  • Cushing +1805K
From the API report late yesterday:
  • Crude +8600K
  • Cushing +1200K
  • Gasoline +567K
  • Distillates +2200K
The report is negative for oil but not nearly as bad as the API numbers had indicated. The closure of the Houston shipping channel on the weekend worked in mysterious ways.

Trump to delay decision on auto tariff imports for up to six months – report

  
  Analysis

Bloomberg report, citing sources

Bloomberg report, citing sources
The decision was due Friday and would have opened another front in the trade war. It was a major worry for European policymakers in particular.
Top US officials discussed the tariffs at a meeting yesterday, according to the report. The idea is to let Japan and EU trade negotiations play out first.
US stocks have wiped out gains on the headlines and USD/JPY jumped to 109.54. The euro is the main beneficiary as EUR/USD climbs 40 pips to 1.2121 and EUR/JPY rallies into positive territory.
The negative spin here is that Trump must believe the battle with China will be a prolonged one and that he doesn’t want to fight on two fronts.
Update: CNBC is out with a similar report:
“The White House faces a May 18 deadline to decide whether to slap duties on car and auto part imports. By law, the administration has another 180 days to come to a decision as long as it is negotiating with its counterparts. Trump sees the tariffs as a way to gain leverage over trading partners such as the European Union and Japan during trade talks.”

Sterling touches lowest since February as Brexit uncertainty drags on

  
Analysis, Forex

The pound brushed its lowest level since mid-February as the UK currency tracked a deepening sense among investors that Westminster’s cross-party talks seeking a consensus on a Brexit agreement were faltering.

At the same time, a move away from risk across global markets left sterling looking exposed, and sent it towards the lower end of its trading range.

Sterling on Wednesday fell 0.5 per cent to trade at $1.2838 in afternoon trading in London, close to its lowest level since February 15. February’s intraday low was $1.2770.

As talks between Theresa May and the opposition leader in London flag, the prime minister challenged Jeremy Corbyn to make up his mind on whether to back her Brexit compromise plan. She meanwhile prepared to put her job on the line in a House of Commons vote in the first week of June.

Mrs May told the Labour leader the government would bring forward legislation to ratify a revised Brexit deal on June 4 or 5. Defeat would probably mean the end of the road for the prime minister and her attempt to take Britain out of the EU.

In talks lasting about an hour on Tuesday night, Mrs May said the government would propose a close customs arrangement with the EU and uphold workers’ rights and environmental protections, meeting some of Labour’s demands.

Eurozone Q1 GDP second estimate +0.4% vs +0.4% q/q prelim

  
Analysis, Economy

Latest data released by Eurostat – 15 May 2019

  • GDP +1.2% vs +1.2% y/y prelim
Preliminary figures can be found here. The figures here are in-line with initial estimates, so it isn’t really telling us anything new with regards to the Eurozone Q1 economic performance. Similar to Germany, expect things to get tougher as the outlook remains blurry with US auto tariffs due and US-China trade tensions still prevailing.
EUR/USD currently holds at 1.1214, bound by a tight range on the day still. EUR/GBP sits at 0.8684, little changed on the session.
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