European Equities higher on CPI DAta, US Equity rally looking exhausted, ASX SPI200 futures up 14 points

European equity markets closed positive on Thursday following the release of Euro-Zone CPI data that matched expectations for March at 1.20% (MoM) and 0.0% (YoY vs -0.1% expected) while the Bank of England left rates on hold at 0.50% as widely anticipated. The DAX30 closed 0.67% higher, followed by the CAC40 +0.47%, FTSE100 +0.03% and the Euro Stoxx 50 +0.71%.

U.S. equities swung between positive and negative territory following the start of earnings season this week with mixed results so far. The benchmark S&P500 index finished flat, up 0.02% while the Nasdaq100 index was little changed at 4554 (0.00%). Looking to US data, and initial jobless claims for April beat expectations of 270,000 vs actual of 253,000 showing continued improvement in the labour market. CPI data missed expectations for March (YoY) with a reading of 0.9% vs 1.10% expected while CPI excluding food & energy was also below expectations of 2.30% with an actual reading of 2.20%. The chart below shows the S&P500 index now trading 2.20% below the all-time high of 2134.72, up an incredible 14% from the February low. Global Investment director Oliver Gordon this morning notes that while the longer-term outlook continues to improve, the rally is looking increasingly exhausted with bearish momentum divergence highlighting the risk of a pause or pullback from current levels.

Both Brent and WTI Crude oil closed lower ahead of the April 17th meeting in Doha, Qatar to discuss an output freeze, down 0.91% and 0.62% respectively and we may see traders continue to take further risk off the table ahead of the meeting. Oil prices dragged commodities broadly lower, iron ore prices closed 1.82% lower while copper futures were relatively flat up 0.005%, meanwhile spot gold and spot silver were down 1.17% and 0.31% respectively.

Looking to the local market, equities are expected to open higher this morning with ASX SPI200 futures up 14 points in overnight trading while the Australian dollar closed 0.81% stronger. Traders should be mindful of major Chinese data out at 12pm AEST.

Data Releases:

·         Chinese Industrial Production (Mar YoY) 12:00pm AEST

·         Chinese Retail Sales (Mar YoY) 12:00pm AEST

·         Chinese GBP (Quarter 1 YoY & QoQ) 12:00pm AEST

·         US Manufacturing Production (Mar) 11:15pm AEST

·         US University of Michigan Confidence (Apr) 12:00am AEST

Source: Rivkin, Bloomberg, Updata
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This article was written by James Woods – Global Investment Analyst, Rivkin Securities Pty Ltd. Enquiries can be made via or by phoning +612 8302 3600.