Round up of today's market news *

North American News

US Stock Market Ends Strongly with Nasdaq and Russell 2000 Leading the Way

The major indices are closing solidly higher led by the Nasdaq and the small-cap Russell 2000 index.

The final numbers are showing:

Dow Industrial Average rose 322.37 points or 0.85% at 38225.67
S&P rose 45.79 points or +0.91% at 5064.19
Nasdaq rose 235.48 points or 1.51% at 15840.96

The small cap Russell 2000 index rose 35.88 points or 1.81% at 2016.11.

Some of the big winners and losers today included:

Moderna, +13.05%
Qualcomm, +9.74%
Alibaba, +6.43%
Boeing, +4.29%
Nvidia, +3.34%
Super Micro Computers, +3.28%
Amazon, +3.20%
Southwest Airlines, +2.92%.

Losers included:

Doordash -10.32%
Exxon, -2.77%
Northrup Grumman, -2.39%
Papa Johns, -1.99%
Biogen, -1.21%
Western Digital, -1.12%
Live Nation, -1.11%

Other big cap names:

Meta Platforms, +0.57%
Alphabet +1.68%
Microsoft +0.73%
Apple (ahead of earnings) +2.20%
Netflix, +2.44%
Tesla, unchanged

Apple EPS $1.53 versus $1.50 exp. Revenues $90.75 billion versus 90.01 billion exp

Authorizes an additional $110 billion of share buybacks (record amount) and boosts quarterly dividend

Earnings Expectations:

Earnings per share (EPS): $1.53 vs $1.50 expectations. BEAT
Revenue: $90.75 vs $90.01 billion expectations: BEAT

Performance by Business Unit:

iPhone revenue: $45.96 billion versus $46.00 billion expectations
Mac revenue: versus $6.86 billion expectations
iPad revenue: $5.56 billion versus $5.91 billion expectations
Wearables, home, and accessories revenue: $7.91 billion versus $8.08 billion expectations
Services revenue: $23.87 billion versus $23.27 billion expectations

Future Projections:

Forecast for the current quarter: Approximately $83.23 billion in sales, representing a 1.8% annual growth.

On China says: “I feel great that in a extraordinary competitive environment that we grew iPhone sales in mainland China.”

In other earnings released after the close:

DraftKings Inc (DKNG)
- Revenue: $1.17 billion (BEAT expectations of $1.12 billion)
- Note: Net income and Adj. EBITDA provided, but EPS not specified.
United States Steel Corp (X)
- Adj. EPS: $0.82 (MISSED expectations of $0.83)
- Revenue: $4.16 billion (MISSED expectations of $4.21 billion)
Block Inc (SQ)
- Adj. EPS: $0.85 (BEAT expectations of $0.72)
- Revenue: $5.96 billion (BEAT expectations of $5.82 billion)
Live Nation Entertainment Inc (LYV)
- EPS: -$0.53 (MISSED expectations of -$0.19)
- Revenue: $3.8 billion (BEAT expectations of $3.26 billion)
Illumina Inc (ILMN)
- Adj. EPS: $0.09 (BEAT expectations of $0.04)
- Revenue: $1.08 billion (BEAT expectations of $1.05 billion)
Monster Beverage Corp (MNST)
- EPS: $0.42 (MISSED expectations of $0.43)
- Revenue: $1.9 billion (MET expectations of $1.9 billion)
Coinbase Global Inc (COIN)
- EPS: $4.40 (BEAT expectations of $1.00)
- Revenue: $1.64 billion (BEAT expectations of $1.34 billion)
Expedia Group Inc (EXPE)
- Adj. EPS: $0.21 (BEAT expectations of -$0.24)
- Revenue: $1.99 billion (BEAT expectations of $1.97 billion)
Amgen Inc (AMGN)
- Adj. EPS: $3.96 (BEAT expectations of $3.87)
- Revenue: $7.45 billion (BEAT expectations of $7.44 billion)
Booking Holdings Inc (BKNG): shares are trading up 6.48% in after-hours trading
- EPS: $20.39 (BEAT expectations of $14.06)
- Revenue: $4.4 billion (BEAT expectations of $4.25 billion)

Atlanta Fed GDPNow estimate for Q2 growth remains unchanged at 3.2% (or is it 3.3%)

Atlanta Fed says with rounding, it is unchanged at 3.3%.

The Atlanta Fed GDPNow growth estimate for Q2 remains unchanged 3.2% after data this morning. In their own words:

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2024 is 3.3 percent on May 2, unchanged from May 1 after rounding. After this morning’s international trade report from the US Census Bureau and the US Bureau of Economic Analysis and the M3-2 manufacturing report by the US Census Bureau, increases in the nowcasts of second-quarter real personal consumption expenditures growth and second-quarter real gross private domestic investment growth from 3.1 percent and 4.0 percent, respectively, to 3.2 percent and 4.1 percent were offset by a decrease in the nowcast of the contribution of the change in real net exports to second-quarter real GDP growth 0.01 percentage points to -0.05 percentage points.

US factory orders for March 1.6% versus 1.6% expected

US factory orders and durable goods orders for March 2024

Prior month 1.4% revised to 1.2%
Factory orders for March 1.6% versus 1.6% expected
Factory orders ex transportation 0.5% versus 1.1% preliminary and 1.1% last month
Durable goods orders for March unrevised at 2.6% preliminary. Last month 0.7%. Best level since November 2023
Durable goods ex transportation 0.2% versus 0.2% preliminary. Last month 0.1%.
Nondefense capital goods Ex air 0.1% versus 0.2% preliminary. Last month 0.4%

A look at shipments shows:

Overall Shipments

Decreased by $0.3 billion or 0.1% in March to $282.1 billion.
Decline observed in three of the last four months. Weak…

Durable Goods

Transportation equipment shipments decreased by $0.5 billion or 0.6% to $89.3 billion.
This sector also saw declines in three of the last four months. Weak.

Nondurable Goods

Increased by $1.9 billion or 0.6% to $301.2 billion.
This rise followed a 1.7% increase in February.
Continuous increase observed over two consecutive months. Strong

Petroleum and Coal Products

Led the increase in nondurable goods with a $0.8 billion or 1.2% rise to $68.7 billion.
Also up for two consecutive months.
Shipments 0.0% vs 0.2% preliminary and -0.6% last month

Unfilled orders summary:

Overall Unfilled Orders

Increased by $6.1 billion or 0.4% in March to $1,397.4 billion.
This increase comes after two consecutive monthly decreases. Rebounds.

Transportation Equipment

Drove the overall increase with a rise of $6.6 billion or 0.7% to $903.2 billion.
This sector has seen increases in twelve of the last thirteen months.

A look at inventories:

Total Inventories: Manufactured durable goods inventories in March decreased slightly by $0.1 billion, remaining steady at $527.8 billion after seven months of increases.
Durable Goods: Specifically, machinery inventories led the decrease, falling by $0.1 billion or 0.1 percent to $95.0 billion, marking a third consecutive month of decline.
Nondurable Goods: Conversely, inventories of manufactured nondurable goods rose by $0.5 billion or 0.2 percent to $329.9 billion, continuing an upward trend for the second consecutive month.
Leading Increases: Petroleum and coal products inventories significantly contributed to the increase, rising $0.2 billion or 0.5 percent to $48.0 billion.
Stage of Fabrication: In March, materials and supplies saw a 0.1 percent decrease in durable goods but a 0.4 percent increase in nondurable goods. Work in process inventories increased by 0.5 percent in durable goods but decreased by 0.1 percent in nondurable goods. Finished goods inventories fell by 0.6 percent in durable goods and rose by 0.1 percent in nondurable goods.

US initial jobless claims 208K versus 212K estimate

Weekly US initial and continuing jobless claims on May 2, 2024

Prior week 207K revised to 208K.
Initial jobless claims 208K versus 212K estimate.
4-week moving average of initial jobless claims 210K vs 213.5K last week.
Continuing claims 1.774M versus 1.797M estimate.
4-week moving average of continuing claims 1.789M vs 1.793M last week.

US Q1 unit labor costs +4.7% vs +3.3% expected

US first quarter unit labor cost data

Prior was +0.4% (revised to 0.0%
Productivity +0.3% vs +0.8% expected
Prior productivity +3.2% (revised to +3.5%)

US trade balance for March -$69.4 billion versus -$69.1 billion estimate

US international trade balance for March 2024

Prior month $-68.9 billion revised to $-69.5B
good trade balance for March $-91.54 billion versus $-91.838 billion
US exports who are $57.6 billion which was $-5.3 billion less than February exports
US imports were $327 billion which was 5.4 billion less than February imports
US goods deficit $-92.5 billion
Services surplus $23.1 billion
Capital goods imports $75.73 billion versus February imports of $75.67 billion
China’s market-rate deficit was $-17.17 billion versus February’s deficit of $-19.88 billion.
US March oil import price was $69.39 versus February’s $66.97. That was 3% higher from March 2023 $67.38 per barrel.

US April Challenger layoffs 64.79k vs 90.31k prior

Latest data released by Challenger, Gray & Christmas, Inc. – 2 May 2024

US-based employers announced 64,789 job cuts in April this year, which is just a little over 3% less than the year before. The sector with the most layoffs on the month was auto makers, primarily after Tesla’s announcement that it would slash 14,000 of its global workforce.

Bank of America still forecasting a December Federal Open Market Committee (FOMC) rate cut

From BoA on the Fed meeting on Wednesday

BoA’s key takeaways from the Fed meeting and Powell’s presser:

At the May FOMC meeting, the Fed acknowledged that they had taken on board some of the signals from the recent inflation data
The Fed is reducing the pace of runoff to lower the risk of a disruption in funding markets
We retain our view for a first rate cut in December on the idea that inflation will remain stickier and slower to come down

Bill Gross: Look for 10-year yields to rise above 5% over the next 12 months

PIMCO co-founder Bill Gross doesn’t believe it will last. The 80-year-old former Bond King released a rare investment outlook today where he warns against betting on falling Treasury yields, in large part due to larger US deficits. Here’s what he had to say:

“Those that argue for lower rates have to counter the inexorable upward climb in Treasury supply and the likely Sisyphean decline in bond prices,” Gross writes. “Look for 5% plus 10-year yields over the next 12 months — not 4.0%. The U.S. economy requires fiscal deficits and net increases in Treasury debt of 1-2 trillion or more annually in order for the economy to grow,” he writes.

BOCs Macklem: There is a limit to how far US/Canada rates can diverge

BOCs Macklem testifying before the House of Commons standing committee on finance

BOCs Macklem is testifying before the House of Commons standing committee of finance and says:

There is a limit to how far US and Canadian interest rates can diverge.
Certainly we are not close to that limit
When asked when rates are coming down, reiterated that the BOC is looking for reassurance that recent fall in underlying inflation will be sustained
Canadian inflation will likely stay close to 2.9% for the next several months, partly due to gasoline prices.
Rates unlikely to go back down to pre-Covid levels
Reiterates that even when we start reducing interest rates, it is likely to be a pretty gradual path
reiterates that the central bank could start cutting rates before inflation hits 2%. Sites importance of seeing a sustainable decline in inflation
If a federal carbon tax were to be eliminated, inflation would drop for one year and then go back up to where it otherwise would have been
If we cut interest rates and that begins for weaken the Canadian dollar, that is something you take into account with how much you need to reduce interest rates.

Canada March trade balance -$2.28 billion vs +$1.50 billion expected

Canadian trade balance
Prior was +$1.38 billion
Exports 62.56B vs 66.10B prior
Imports 64.84B vs 65.62B prior

Bank of Canada Governor Macklem expects core inflation to continue to ease gradually

Macklem says getting close to cutting rates

Says looking ahead, we expect core inflation to continue to ease gradually
Data since January have increased our confidence that inflation will continue to come down gradually
We are getting closer to being able to cut rates
cut in rates a signal we are on track to 2% inflation
We don’t have to do what the fed does
Canada growth this year will probably be choppy
A cut in rates would signal we’re on a track back to 2% inflation
Jobless rate might go up but we don’t see a recession

Bank of Canada’s Rogers says not seeing a high level of stress in the mortgage market

Rogers and Macklem appearing in parliament (committee)
We are not seeing a high level of stress in the mortgage market
Data is not telling us so far that we have a mortgage crisis

Commodities

Gold slumps amid falling US yields, weak US Dollar

Gold stabilizes at $2,305, down 0.60% amid positive sentiment, lower US Treasury yields, softer USD.
Fed holds fed funds rate, tweaks to QT program influence market dynamics.
Chair Powell urges caution on rate changes pending clearer inflation progress.

Gold clings to the $2,300 figure in the mid-North American session on Thursday amid an upbeat market sentiment, falling US Treasury yields, and a softer US Dollar. Traders are still digesting Wednesday’s comments of the Federal Reserve’s Chairman, Jerome Powell, and the US central bank’s decision to hold rates unchanged. Meanwhile, data showed the US trade deficit narrowed a tick, and the labor market is still tight.

The yellow metal trades at $2,305, down by 0.60%. Market participants expected a more hawkish tilt by the Fed, which remained neutral. The central bank delivered a neutral monetary policy statement and announced that it would reduce the pace of its QT program.

Silver retreats from $26.80 amid uncertainty ahead of US NFP

Silver price drops from $26.80 as US Dollar, bond yields rebound ahead of US Employment data.
The US Employment data will influence speculation for Fed rate cuts in June.
The Fed is still confident of rate cuts this year despite progress in disinflation has stalled.

The price of Silver fell back sharply to $26.20 while attempting to recapture the crucial resistance of $27.00 during the European session on Thursday. The white metal faces pressure as the US Dollar and bond yields attempt to recover amid uncertainty ahead of NFP and the ISM Services PMI data for April, which will be published on Friday.

OPEC+ reportedly could extend voluntary cuts beyond Q2

Formal talks are yet to begin though, according to the sources cited by Reuters

For some context, the existing 2.2 mil bpd worth of oil production cuts are to run until June. Three sources cited in the report say that even though formal talks have yet to begin on the matter, an extension to the voluntary cuts are likely. But another source did say that OPEC+ is not yet leaning one way or the other.

EU News

Major European stock indices closing the day with mixed results

German DAX and France CAC move lower

The major European stock indices are ending the day mixed. The German DAX and France CAC both moved lower.

A snapshot of the closing levels shows:

German DAX, -0.15%
France CAC, -0.88%
UK FTSE 100 under +0.63%
Spain’s Ibex, +0.19%
Italy’s FTSE MIB, unchanged
Eurostat 50 index -0.51%

Looking at European benchmark 10 year yields:

German, 2.553%, -3.1 basis points
France 3.052%, -2.5 base points
UK 4.297%, -6.3 basis points
Spain 3.324%, -3.0 basis points
Italy 3.874%, -0.9 basis points

Eurozone Final April Manufacturing PMI 45.7 vs. 45.6 expected

The final reading on the Eurozone Manufacturing PMI from HCOB.

Eurozone Final April Manufacturing PMI 45.7 vs. 45.6 expected and 46.1 prior.

Key findings:

HCOB Eurozone Manufacturing PMI at 45.7 (Mar: 46.1). 4-month low.
HCOB Eurozone Manufacturing PMI Output Index at 47.3 (Mar: 47.1). 12-month high.
Factory production falls at slowest pace in a year and confidence rises, but new order decline quickens

Comment:

“What is going to rescue the Eurozone economy? While this is a difficult question, one thing is clear: It’s not the manufacturing sector. Instead, this sector is prolonging its drawn out recession into April. Output shrank at a similar pace as in the months before and companies have reduced their purchases at an accelerated rate. Compounding the issue, there is no sign of a turnaround in the inventory cycle, but instead we saw a sustained trend of depleting stockpiles of both purchased and final goods in April.

“A plethora of evidence highlights the stark absence of demand, as evidenced by a rapid decline in new orders, unmatched in speed over the past four months and devoid of international support. Consequently, backlogs of work dwindled further. Concurrently, expedited delivery schedules by suppliers in April and over the preceding few months reveal abundant logistical capacity, a testament to the dearth of orders. This comprehensive snapshot portends a postponement of any semblance of recovery, likely extending well into the summer.

“A recovery often starts with some positive momentum in the capital goods sector. Instead, and in a worrying sign, capital goods have been hit particularly hard in April as demand for these goods fell at an accelerated pace in the top three euro countries. Of particular concern is Germany, the industrial powerhouse, grappling with a pervasive downturn spanning key sectors including capital goods, intermediate goods, and consumer goods.

“Spain’s economic pulse diverges from the Eurozone’s rhythm. This is evidenced by the sustained growth of its manufacturing sector for the third successive month, with April showcasing a noteworthy expansion. This positive momentum starkly contrasts with the subdued outcomes witnessed in Germany, France, and Italy. Bolstered by a favourable global landscape, there is anticipation that this disparity will gradually narrow in the coming months.”

Germany April final manufacturing PMI 42.5 vs 42.2 prelim

Latest data released by HCOB – 2 May 2024

Prior 41.9

It’s a mild revision higher as the German manufacturing downturn eases a touch in April. But at 42.5, that’s still a very poor reading as the sector remains well in recession to start the new year. A further decline in new orders isn’t helping but at least the production slowdown is easing slightly. HCOB notes that:

“Anyone looking for encouraging economic signals from the manufacturing sector will be somewhat frustrated when analysing the HCOB PMI figures for Germany. The headline index remains deep in recessionary territory in April, new orders are falling even faster than before and instead of restocking inventories of purchased goods, they continue to be depleted. This contrasts with the moderate yet discernible recovery observed in the manufacturing sectors of many other countries worldwide, suggesting that structural factors are exerting a significant dampening effect in Germany. One such factor is the diminishing role of China as a source of demand for German exporters, owing to lower growth in the Asian country. Moreover, China is increasingly emerging as a competitor for German mechanical engineering companies and car manufacturers, within China, in Germany and globally. For instance, while exports of cars from Germany to China fell by 2% over three years up to 2023, imports of cars from China to Germany surged by 250% during the same period.

“Are we seeing a turning point for the better? At an early stage, such developments can often be recognised when the deterioration of the situation is softening. In this sense, the weaker decline in production in April is a good sign, and the same applies to employment, the order backlog and the slight rise in the export orders index. German industry has by no means given up, but is instead mostly confident that it will produce more in a year’s time than it does today. On average, however, future sentiment has been somewhat better in the past than at present. Overall, there is a possibility that the industry may return to growth territory in the second half of the year, primarily due to a somewhat brighter global economic environment.

“Over the past 15 months, prices for industrial inputs, including raw materials and energy, have experienced a significant decline. As the reduction in sales prices began later and was less pronounced, the industry was able to expand its profit margins during this period. However, this trend seems to be reversing, as selling prices fell at a similar rate to input prices in April. In light of this development, it raises questions about whether German companies will be able to sustain the same level of profitability seen over the past two years.”

France Final April Manufacturing PMI 45.3 vs. 44.9 expected

The final reading on the French Manufacturing PMI from HCOB.

Final Manufacturing PMI 45.3 vs. 44.9 expected and 46.2 prior.

Key findings:

French factory output restricted by rapid fall in new orders.
Backlogs used to support production; workforces shrink further.
Input price inflation at 14-month high amid rising material costs.

Comment:

Commenting on the PMI data, Norman Liebke, Economist at Hamburg Commercial Bank, said: “French manufacturing output stayed subdued in April. The manufacturing sector continues to thwart the overall economy’s recovery, but this should only be temporarily. The Output Index dropped, reflecting a faster demand deterioration. Nevertheless, we expect a recovery in the manufacturing sector in the third quarter of this year.

“Consumer goods remain at the forefront of the manufacturing recovery. While the other two segments – intermediate and investment goods – are still declining at a fast pace. This divergence has generally been ongoing since the middle of 2023 in output and overall new orders. “Input prices are getting hotter. Input prices increased after several months of continuous decline, mainly due to the consumer goods sector. Anecdotal evidence suggests that higher input costs were due to greater prices for oil-based products, steel and foodstuff. “Notably, French manufacturers are optimistic about the future.

The corresponding index for output expectations is above 50 for the third month in a row. Manufacturers are building their optimism due to expectations of stronger demand domestically and abroad, while also hoping for a betterment of economic conditions. In addition, a slower pace of French manufacturers’ job cutting also fits into the picture of a more optimistic outlook.”

Italy April manufacturing PMI 47.3 vs 50.0 expected

Latest data released by HCOB – 2 May 2024

Prior 50.4

That’s a bummer as Italy’s manufacturing sector slips back into contraction in April. There were renewed declines in output and new orders, with input prices also rising for the first time since January 2023. HCOB notes that:

“The manufacturing sector in Italy has taken a step backward. In April, the HCOB Manufacturing PMI dropped after just one month of surpassing the 50.0 mark. This indicates that the economy may not be on as strong a recovery path as previously thought. The downward risks posed by input price inflation and interest rates continue to make life difficult for the Italian industry.

“There’s a lot of shadow and little light. To glean optimism from the numbers, one must look closely. The Employment Index fell in April compared to the previous month but is still showing growth. However, if weak demand for Italian manufactured goods persists, the uptick in hiring could be reversed. Another source of optimism is the improvement in supplier delivery times despite ongoing tensions in the Red Sea. However, the significant easing of supply chains also reflects the weak demand situation.

“Inflation concerns resurface in the industry. The recent weakness in demand is compounded by rising input prices. A look at the oil markets reveals that geopolitical tensions in April, for example, briefly pushed the price of Brent crude even above $90 per barrel. According to surveyed industrial companies, output prices had to be lowered due to weak demand. While the Output Prices Index increased compared to the previous month, it remains in contraction territory for now.

“The outlook is mixed. Both total and foreign order intakes have significantly declined compared to the previous month. The contraction, especially in new export orders, is concerning and should continue to be closely monitored. Surprisingly, the Future Output Index is significantly above its historical trend. Surveyed companies cite hopes for a market recovery as the primary source of their optimism.”

Spain April manufacturing PMI 52.2 vs 50.8 expected

Latest data released by HCOB – 2 May 2024

Prior 51.4

That’s a decent beat as Spanish manufacturing activity posts stronger growth in April. That’s the third month in a row now that it holds above the 50.0 threshold. Of note, both output and new orders saw firm rises on the month. HCOB notes that:

“Spain continues to shine as the top performer among major eurozone countries. While we have yet to see a recovery in manufacturing across the eurozone, Spain sustained the growth trend it embarked upon in February and March. Indicators suggest that the upswing in Spain’s manufacturing sector is driven by the ongoing improvement in demand both domestically and internationally. Hence, it’s no surprise that industrial firms are ramping up their production for the third consecutive month.

“The upbeat trend also spells good news for workers. Backlogs of work have grown for the third consecutive month in April, coupled with high confidence in a favourable business outlook in the coming months, prompting industrial companies to continue hiring. The only downside to this solid development in manufacturing is that company input prices are rising. Surveyed companies report that the increase in input prices is driven by higher raw material prices. Due to the lack of pricing power, this cannot be translated into rising output prices.

“Growth is evident across all sub-sectors. Consumer goods continue to exhibit the strongest growth in Spain’s industry, as production and orders for consumer goods remain very robust and accelerated in April. However, both investment and intermediate goods also showed improvements, as both were able to expand production. While orders improved for investment goods, they declined slightly for intermediate goods.”

Switzerland April CPI +1.4% vs +1.1% y/y expected

Latest data released by the Federal Statistics Office – 2 May 2024

Prior +1.0%
Core CPI +1.2% y/y
Prior +1.0%

Swiss March Retail Sales Y/Y -0.1% vs. 0.2% expected and 0.2% prior

The latest data from the Swiss Federal Statistical Office on Retail Sales.

Retail Sales Y/Y -0.1% vs. 0.2% expected and 0.2% prior (revised from -0.2%).
Retail Sales M/M -0.4% vs. 0.1% prior (revised from -0.1%).

Swiss April Manufacturing PMI 41.4 vs. 45.5 expected

The latest Swiss Manufacturing Purchasing Managers’ Index

Swiss Manufacturing PMI 41.4 vs. 45.5 expected and 45.2 prior.

ECB’s Lane says the Bank is not pre-committing to a particular rate path – data dependent

The ECB will continue to follow a data-dependent and meeting-by-meeting approach
Given the lags in transmission, the tightening effects from our past interest rate hikes are still unfolding
Expectations of future inflation normalise further, leaving nominal rates unchanged implies a mechanical increase in real interest rates
There are two-sided risks in proceeding through the next phase
Moving from one meeting to the next meeting and from one projection round to the next projection round allows for the accumulation of further data that can help inform the rate decision

Asia-Pacific-World News

OECD upgrades global growth forecast

OECD raises its global growth forecast for 2024

🌎 2024 global growth forecast 3.1% (previously 2.9%)
🌎 2025 global growth forecast 3.2% (previously 3.0%)
🇺🇸 2024 US growth forecast 2.6% (previously 2.1%)
🇺🇸 2025 US growth forecast 1.8% (previously 1.7%)
🇪🇺 2024 Eurozone growth forecast 0.7% (previously 0.6%)
🇪🇺 2025 Eurozone growth forecast 1.5 (previously 1.3%)
🇯🇵 2024 Japan growth forecast 0.5% (previously 1.0%)
🇯🇵 2025 Japan growth forecast 1.1% (previously 1.0%)
🇬🇧 2024 UK growth forecast 0.4% (previously 0.7%)
🇬🇧 2025 UK growth forecast 1.5% (previously 1.3%)
🇨🇳 2024 China growth forecast 4.9% (previously 4.7%)
🇨🇳 2025 China growth forecast 4.5% (previously 4.2%)

South Korea finance minister vows ‘bold market stabilization measures’ against excessive volatility

Finance Minister Choi Sang-mok held an emergency meeting

South Korean media (Yonhao) with the info:
Finance Minister Choi Sang-mok vowed Thursday to stay vigilant on uncertainties regarding interest rate decisions by major economies and the Middle East crisis and to take bold market stabilization steps when necessary.

Choi made the remarks during an emergency macroeconomic meeting he called to assess the Federal Reserve’s FOMC meeting.

New Zealand Building Permits for March 2024 -0.2% m/m (prior +14.9%)

NZ bulidng permits data dipped a little on the month. Its a choppy data series but the yearly performance is not encouraging. S

Says Stas NZ:

“The annual number of new homes consented has continued to decrease from its peak of 51,015 in the year ended May 2022”

BOJ accounts suggest Japan intervened in FX market on 1 May

Japan may have spent between ¥3.26 to ¥3.66 trillion on said intervention

The projections are from Reuters with Bloomberg calculating that the BOJ might have spent about ¥3.5 trillion instead. The BOJ’s projected accounts for Tuesday shows a net receipt of ¥4.36 trillion in funds. And if you offset that with the roughly ¥0.7 trillion to ¥1.1 trillion estimate from money market brokerages, that leaves with roughly the amount above in terms of money spent on intervention.

Japan April consumer confidence index 38.3 vs 39.5 prior

Latest data released by the Japan Cabinet Office – 2 May 2024

The breakdown on the month shows that:

Overall livelihood: 36.1 (down 1.4 from March)
Income growth: 41.1 (down 0.4 from March)
Employment: 44.2 (down 0.8 from March)
Willingness to buy durable goods: 31.8 (down 2.2 from March)

BOJ March meeting minutes says Japan’s tightening is different to that in the US and EU

These are the minutes of the meeting helped on March 18 and 19 2024.

Headlines via Reuters:

One member said impact of rise in short-term rate to around 0.1% on economy will likely be limited
Many members shared view long-term rates should basically be set by markets
Ne member said adjustment to BOJ’s bond buying amount should be done spending plenty of time to avoid causing sharp market volatility
A few members said the BOJ should at some point in the future reduce bond buying amount, shrink its bond holdings

A few members said BOJ March move is different from the monetary tightening phase experienced in US, Europe
One member said BOJ should slowly but steadily move towards policy normalisation with an eye on economic, price developments
A few members said while not a big risk now, there is chance of overshoot in Japan’s inflation

The representative from the Ministry of Finance at the meeting chimed in:

Expects BOJ to continue aiming for achievement of 2% inflation target in stable, sustained manner
while wages, capex showing positive movements, consumption lacking strength, overseas risks exist

The representative from the Cabinet Office said:

The government shares the BOJ’s view that positive wage-inflation cycle is emerging
BOJ must continue to support the economy for a financial standpoint to achieve sustained, domestic demenad-drive economic recovery

Japan’s Kanda says he has nothing to say about whether Japan intervened in the yen

Masato Kanda is vice-minister for international affairs at Japan’s Ministry of Finance. He is the official who will instruct the BOJ to intervene, when he judges it necessary, and is often referred to as Japan’s ‘top currency diplomat’.

nothing to say about whether Japan intervened in the FX market

Japan’s Ministry of Finance have revealed their very weak hand propping up the yen

While the Bank of Japan do the intervention, it’s the MoF pulling the strings

The BOJ intervened first on a Japanese holiday, that was on Monday this week. And then for a second time just hours ago, during the morning.

While both times they had an impact, and they’ll be gratified, these 2 times are both indications of how weak they, and the Ministry of Finance, are:

1. They don’t want to spend too much of their USD reserves:

Japan’s foreign exchange reserves are limited
the 2022 interventions cost the country about US$62 billion

Cryptocurrency News

Jack Dorsey’s Block says it will buy bitcoin every month with 10% of its gross profit

This now from Dorsey’s “Bitcoin Blueprint For Corporate Balance Sheets”

With the launch of Square’s Bitcoin Conversions product, which allows sellers to automatically convert a portion of their sales into bitcoin holdings, we are announcing our new corporate balance sheet dollar cost average (“DCA”) program, under which each month we will be investing 10% of Block’s monthly gross profit from bitcoin 1 products into purchases of bitcoin for investment. As an evolution from our previous strategy of purchasing bitcoin in lump sums, the program brings a principled investment approach to Block’s commitment to the asset class
Under the DCA program, we plan to purchase bitcoin on a monthly cadence utilizing TWAP orders, starting April 2024. We will execute these over a shorter time window due to lower notional trade values and improved bitcoin liquidity compared to 2020 and 2021. To reduce slippage, we have chosen to purchase bitcoin over a two-hour window that has historically had the greatest amount of liquidity.

Bitcoin price rises 5% as BlackRock anticipates a new wave of capital inflows into BTC ETFs from investors

BlackRock head of digital assets says new wave of investors is likely to pour into the BTC ETF space.
After 71 days of capital inflows into Bitcoin ETFs, markets witnessed an unusual lull that denied tailwinds for BTC price.
Bitcoin price holds above $59,000 after an intraday low of $56,552 on Wednesday.

Bitcoin slid to the depths of $56,552 on Wednesday as the cryptocurrency market tried to front run the FOMC meeting. The flash crash saw millions in positions get liquidated. Amid an ongoing slow grind up, a BlackRock executive has indicated what could be new tailwinds for the market soon.

BlackRock anticipates a new wave of capital inflows into Bitcoin ETFs from investors

Speaking to a news site, BlackRock head of digital assets Robert Mitchnick said they anticipate a new wave of inflows from “a different type of investor.” This assertion comes after a period of significant lull in terms of capital inflows into the BTC exchange-traded funds (ETFs) market.

Specifically, Mitchnick says the new players could include financial institutions like sovereign wealth funds, pension funds and endowments. If these classes of investors begin to trade spot ETFs, the BlackRock executive said it would signify “a re-initiation of the discussion around Bitcoin.”

Further, Mitchnick revealed that BlackRock, the world’s largest asset management firm, has been talking to different sorts of institutions, including “pensions, endowments, sovereign wealth funds, insurers, other asset managers, and family offices,” among others, about BTC for several years.

Elsewhere, a filling (13F report) from the US Securities & Exchange Commission (SEC) indicates that the second largest European bank (by assets), BNP Paribas, purchased BlackRock BTC ETF shares (IBIT).

XRP tests $0.52 resistance while XRP Ledger developers propose lending protocol on the blockchain

Ripple sees XRP Ledger developers propose direct lending on the blockchain, no smart contracts involved.
XRP attempts to break past and close above $0.52 resistance for the sixth consecutive day.
XRP holders keep eyes peeled for SEC reply brief, deadline is May 6.

Ripple (XRP) has failed to close above $0.52 for five consecutive days, struggling with the sticky resistance. XRP holders digested the news of US Securities and Exchange Commission’s (SEC) response to Ripple in its filing that addressed the issue of “expert testimony.” Traders now have their eyes peeled for the court’s decision on the next major concern, the $2 billion fine proposed by the SEC and Ripple’s counter of $10 million.

XRP Ledger developers have proposed the introduction of direct lending on the blockchain, without the involvement of smart contracts. The proposal has garnered interest in the XRP holder community.

AAVE proposes a slew of upgrades and expansions in plan for 2030

Aave has proposed major upgrades like Aave V4, Aave Network, cross-chain liquidity layer, and non-EVM deployments.
Aave’s plan for 2030 and beyond is to improve users’ experience and enhance protocols to come at par with competitors.
AAVE price added nearly 2% to its value in the past 24 hours as holders digest the news.

Aave (AAVE) has proposed a Unified Liquidity Layer, V4, and solutions to enhance and compete with zero-knowledge (ZK) networks in its plan for 2030 and beyond. The proposal states that Aave aims to implement its plan together with the community within the next three years.

AAVE price surges as traders digest new plans

According to a temperature check governance proposal on AAVE, the DeFi project has plans to improve and push the protocol at par with zk-based competitors, while improving the experience for users. Aave has lined up several changes and proposed to implement them within a three year timeline since Aave Labs is confined to this time period.

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ByBilals Tech