Europaräntorna to rise slightly on Tuesday, with German interest rates 1-2 points up. Stock markets are on the whole, the plus while the euro drops further.
The markets continue thus to act a little bit tentative after having ticked of the French election results on Sunday.
Many have noted that the volatility index has fallen back to low levels, and where the CBOE’s VIX index on Monday closed at its lowest level since december 1993.
The incoming data showed that German industrial output fell 0.4% in march, expected-0.7 per cent, with subdued demand for capital goods and energy. Februariutfallet was revised down slightly.
Exports rose 0.4 per cent in march , while imports grew by 2.4 per cent, more than the expected 0.2 and 1.6 per cent.
Unicredit notes that the damping in march can be seen as a ”correction” after two strong months, and although February was revised down, so has the production of the entire first quarter increased 1.4 per cent compared with the previous quarter.
”It is thus a technical break after the usual monthly volatility but certainly not the end of the recovery. Företagssentimentet have remained at elevated levels at later time or even increased further. The continued rise in new orders and exports (hard data) also suggest ongoing recovery,” writes Unicredit.
On Friday published the preliminary German GDP outcome for the first quarter, which is expected to show a rise of 0.6 per cent from the previous quarter, according to the Bloomberg News survey. In the next week will be the preliminary GDP for the entire euro area.
The GOVERNING rådsledamoten Yves Mersch spoke on Monday on improved growth prospects and on Wednesday, the ECB president, Mario Draghi speak. At the last council meeting was the attitude that even if riskbalansen be improved for the growth it has not yet made it to inflation in order to justify the change of direction.
Analysts have also begun to expect a gradual adjustment of the forward-looking guidance in the near future, with the main focus of the next council meeting on 8 June.
”Draghi has been dovish so far, but if he changes the tone, so we can get to see a turn of power. During the next two months, I think the euro has the greatest potential on the upside, given that Draghi tried to manage market expectations in the dovish direction, unlike the Fed,” said Kyosuke Suzuki at Societe Generale to Reuters.
United states-interest rates have risen slightly in the Europahandeln, but shows little change from american trading on Monday.
In the afternoon published NFIB småföretagarindex, the weekly retail sales, wholesale stock and JOLTS- (number of vacancies).
The Fed chief in Cleveland, Loretta Mester, said in an interview with Bloomberg News, that the bad things happen when the central bank keeps interest rates too low for too long. She urged her colleagues to deliver a gradually tighter monetary policy.
”I don’t think we are far behind the curve. In this environment, as we continue to make progress toward our goals, we need to increase the key interest rates, because if you do not, then you will end up after, and then the result is never good,” she said.
Later on Tuesday, talking a couple of Fed members.
According to CME Groups Fed watch tool” is a raise in June inprisad to 88 per cent.
The yen has dropped to 113:50 against the dollar and to the 124:10 against the euro during Tuesday.
BOJ chief Haruhiko Kuroda said on Tuesday that they expected to reach the inflation target sometime during the next financial year if they continue with the expansionary policy.
He reminded the board that they recently upgraded the economic outlook and the global economy grows stronger. Japan’s utbudsgap improving at a fast pace and the labour market is tight.
”If we continue our current aggressive monetary relief, so I think that inflation will reach 2 per cent during the financial year 2018. But we have postponed the case, so I want to monitor inflation expectations and act quickly if necessary,” he said, according to Reuters.
Swedish interest rates traded slightly up, while the crown lost 1-2 penny against the dollar and the euro.
The Swedish Trade/type, old Stilindex for the month of april showed that sales of clothes and shoes fell.
Mikael Sandström, branschordförande for the Swedish Trade Style, took note of yet another minusmånad for the fashion industry.
”To easter with several red days is not particularly large for durable goods generally is a explanation. A grim weather has also contributed, despite the fact that last year’s April weather was also not particularly spring-like,” he said in a comment.
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