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Executive Summary
In political news Macron won the election in France, a sign seen as a confirmation for the European idea. In Asia, China is still dealing with lockdowns across the country. There are rumours that Beijing is going into lockdown too.
Markets had a red week. Liquidity is drying up slowly and market participants are adjusting to slower growth. Equities were down across the board worldwide. In sectors, especially Financials and Tech has been hit hard. Next week are tech earnings to keep in mind. The rise of bond yields seems to slow for a moment. Commodities were also down, showing a lot of volatility, especially in precious metals and energy. US dollar showed strength, so did the Euro. Australian Dollar and Pound were weak.
This week Italy and Spain show GDP data, there is European Inflation data coming and the Bank of Japan makes its interest rate decision.
Economics
EUROZONE (MAR) EU27 NEW CAR REGISTRATIONS ACTUAL: -20.5% VS -6.7% PREVIOUS -- Twitter from 2022-04-20
"CANADA CPI (MOM) (MAR) ACTUAL: 1.4% VS 1.0% PREVIOUS; EST 0.9% CANADA CPI (YOY) (MAR) ACTUAL: 6.7% VS 5.7% PREVIOUS; EST 6.1% -- Twitter from 2022-04-20"
GERMAN PPI YOY ACTUAL 30.9% (FORECAST 30%, PREVIOUS 25.9%) $MACRO -- Twitter from 2022-04-20
ING Economics
POWELL: IS CLEAR THAT GLOBALIZATION HAS SLOWED DOWN, MAY GO INTO REVERSE -- Twitter from 2022-04-21
S&P: GROWTH OUTLOOK FOR THE UK HAS BEEN REVISED FROM 4.6% IN DECEMBER TO 3.5% IN 2022. -- Twitter from 2022-04-22
Retail sales fell by 1.4% in March, the second consecutive monthly decline, driven largely by a sharp fall in online spending. This follows news earlier today that consumer confidence has fallen to just one point above its all-time low. -- ING Economics
MORGAN STANLEY REVISES DOWN EURO ZONE 2022 GDP FCAST TO 2.7% FROM 3% EARLIER, ALSO CUTS 2023 FORECAST BY 1% TO 1.3% -- Twitter from 2022-04-25
IFO APRIL GERMAN BUSINESS CONFIDENCE INDEX AT 91.8; EST. 89.0 IFO APRIL GERMAN CURRENT ASSESSMENT INDEX AT 97.2; EST. 95.9 IFO APRIL GERMAN EXPECTATIONS INDEX AT 86.7; EST. 83.5 -- Twitter from 2022-04-25
GERMAN GOVERNMENT RAISES 2022 CPI FORECAST TO 6.1% IN SPRING FORECASTS, UP FROM 3.3% IN JANUARY - DOCUMENT. -- Twitter from 2022-04-25
Politics
The Biden administration will no longer enforce a U.S. mask mandate on public transportation, after a federal judge in Florida on Monday ruled that the 14-month-old directive was unlawful, overturning a key White House effort to reduce the spread of COVID-19. -- Refinitiv Morning News Call Europe 2022-04-19
EU COMMISSION APPROVES 20-BLN-EURO GERMAN SCHEME TO HELP COMPANIES AFFECTED BY SANCTIONS AGAINST RUSSIA EU COMMISSION APPROVES 836-MLN-EURO POLISH STATE AID FOR AGRICULTURAL SECTOR DISRUPTED BY SANCTIONS AGAINST RUSSIA -- Twitter from 2022-04-19
JOE BIDEN TOLD OBAMA THAT HE PLANS TO RUN FOR PRESIDENT AGAIN IN 2024 -- Twitter from 2022-04-20
ISRAEL ADDS CHINA'S YUAN FOR THE FIRST TIME EVER TO ITS RESERVE HOLDINGS; CUTTING ITS EURO AND DOLLAR HOLDINGS BIGGEST RESHUFFLE IN A DECADE -BBG -- Twitter from 2022-04-23
LE PEN CONCEDED DEFEAT TO FRANCE’S PRES. MACRON IN FRENCH ELECTION -- Twitter from 2022-04-24
RUSSIA SAYS IT WILL FULLY DEVELOP AND INVEST IN KURIL ISLANDS (NORTHERN TERRITORIES FOR JAPAN) IN RESPONSE TO WHAT IT REGARDS AS FALSE JAPANESE ASSERTIONS ABOUT ITS ILLEGAL 'OCCUPATION' OF SOME OF ISLANDS - TASS -- Twitter from 2022-04-25
Monetary Policy
Producer Price Inflation MoM in Portugal increased to 6.20 percent in March from 2.70 percent in February of 2022. https://t.co/JZp15z3SOO https://t.co/eMnYCG9h0x -- Twitter from 2022-04-19
Commentary by the author: This can be interpreted as inflation spreading more evenly across the European Union.
FED'S MESTER: THE SHOCK OF A 75 BPS RATE HIKE IS NOT NEEDED. -- Twitter from 2022-04-22
Woah! Big drop in Fed liquidity injections this week (and USD strong!) ... admittedly looks like a blip but watch-out in case... @gnoble79 @rbrtrmstrng @johnauthers @JackFarley96 https://t.co/rAU77WF5jt -- Twitter from 2022-04-22
NOMURA EXPECTS, IN BOTH JUNE AND JULY, THE FED TO HIKE RATES BY 75 BPS. -- Twitter from 2022-04-22
Markets
Equities
"A classic sign of a commodities cycle in its early innings. Producers remain so financially restrained to invest in their businesses that they are almost giving more capital back to shareholders than what they spend on CAPEX. https://t.co/mEhCRh9xUn -- Twitter from 2022-04-24"
Bonds
BOFA STRATEGISTS GO LONG ON US 10-YEAR TREASURIES, TARGETING A 2.25% RATE. -- Twitter from 2022-04-20
Commodities
EU GAS PRICE TO SHOOT UP AS EU TO DECLARE EMBARGO ON RUSSIAN OIL AFTER FRENCH ELECTION NEXT WEEK - SOURCE -- Twitter from 2022-04-19
OilX, a consultancy that uses imaging data from NASA satellites to measure flaring, estimates that Russian output fell to a low of 9.76mbpd. April represents a big drop from the 11.1 million of February, before the impact of the invasion of Ukraine, and the 11 million of March. https://t.co/MJc3g9Q2UH -- Twitter from 2022-04-21
The (european) region has basically finished heating season, and whilst (gas) inventories are still quite some distance below the five-year average, they are at relatively more comfortable levels — ING Economics 2022-04-21
The International Energy Agency (IEA) estimates that European gas demand fell by around 4% year-on-year over the 2021/22 heating season due to milder weather and weaker industrial demand.
The IEA estimates that European gas demand over 2022 will fall by around 6% year-on-year.
Over the fourth quarter of 2021, Russian pipeline flows into the EU fell by 24% year-on-year. (…) However, since the war, Russian gas flows to Europe have picked up. Daily average flows in March were up 17% month-on-month, and 40% higher than levels seen in January.
Even if Russia did not restrict flows, European buyers would likely be reluctant to extend long term contracts for Russian gas as they come to an end, given the European Commission’s push to become independent of Russian fossil fuels. According to the IEA, European buyers have import contracts equivalent to 15bcm per year which are set to expire by the end of 2022.
Higher gold price needed to balance the physical market. — Goldman Sachs https://t.co/o0M91mGbSh -- Twitterfrom 2022-04-23