A look at the day ahead in the US and global markets by Mike Dolan
As Wall Street reins in its recent recovery, global markets have turned their attention to China’s intermittent recovery and question whether the Bank of England’s latest policy decision on Thursday could indicate it is ready to ease credit soon. next month.
Futures on US stocks as well as Asian and European stocks have become more subdued overall. But Chinese stocks clearly outperformed overnight following news that the country’s exports and imports were returning to growth in April, raising hopes that government stimulus measures could begin to take effect.
Shipments from China rose 1.5% in the year to last month, while imports for April rose 8.4%, beating the expected 4.8% rise. Imports and exports reversed March declines.
The trade figures add boost to the global demand outlook on the margins at a delicate time for central banks – pushing oil prices higher again on Thursday, alongside data showing a surprise drawdown of US inventories.
But they probably also mask significant upheavals in bilateral trade flows. Reuters calculations, based on official data from the German Statistical Office, show, for example, that the United States overtook China as Germany’s largest trading partner in the first quarter of this year.
However, some easing of restrictions in the real estate market added to the Chinese market’s enthusiasm on Thursday. China’s eastern metropolis of Hangzhou has announced it will lift all restrictions on home purchases to shore up its real estate market, raising the possibility that other cities will follow suit. .
This latest development also comes against the backdrop of an intensifying conflict in the technology sector between Washington and Beijing.
US Commerce Secretary Gina Raimondo said on Wednesday that a Chinese invasion of Taiwan and seizure of chip producer TSMC would be “absolutely devastating” to the US economy. Declining to comment on how or if that would happen, she told a House hearing that the United States buys 92% of its cutting-edge chips from TSMC.
Intel, meanwhile, fell more than 2% on Wednesday after warning of a negative impact on its sales from the United States, revoking some of the chipmaker’s export licenses to China.
It’s been an eventful week in the tech sector in general. Arm Holdings fell 10% in after-hours trading overnight after its full-year revenue forecast missed expectations.
Wall St stock futures were slightly lower ahead of Thursday’s open, Treasury yields were a bit higher and the dollar was also firmer.
Wednesday’s 10-year Treasury auction was a bit tepid, and bond investors are now expecting $25 billion in new 30-year bonds later Thursday.
Fed officials continue to appear cautious, while downplaying the need to raise interest rates again. Boston Fed President Susan Collins said current monetary policy would slow the economy to the extent she considers necessary to bring inflation back to the Fed’s 2% target.
Back in Europe, the Bank of England’s decision is the center of attention and the pound sterling is lagging in the middle…
