EUROPEAN INFLATION: Energy Drives Downward Revision To Italian April HICP
May-16 08:52
The energy component drove the downward revision to Italian April HICP. Headline HICP inflation was 2.04% Y/Y (vs 2.13% prior, 2.1% flash), with energy at -0.74% Y/Y (vs 2.68% prior, -0.2% flash).
- A reminder that the few analyst estimates we had seen ahead of the flash release looked for an acceleration in energy to over 4% on a base effect. HICP details indicate a -9.04% Y/Y rate on liquid fuels (vs -6.46% prior).
- HICP excluding energy and unprocessed foods was confirmed at 2.13% Y/Y (vs 1.90% prior).
- Services accelerated to 3.44% (vs 2.77% prior). As we had suspected following the flash release, Easter effects were at play. Airfare inflation was 15.44% Y/Y (vs -6.56% prior). Smaller impacts were seen in package holidays (5.42% Y/Y vs 9.81% prior) and accommodation (4.95% Y/Y vs 3.38% prior). Other “underlying” services components saw modest changes relative to March on aggregate.
- Non-energy industrial goods inflation was soft at 0.26% Y/Y (vs 0.54% prior), while processed foods ticked up to 2.38% Y/Y (vs 2.23% prior).
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EQUITIES: Equity Option Expiry Thursday
Apr-16 08:51
Equity Options Expiries are Tomorrow (Thursday), because Markets are closed for Easter Friday. In Notional terms:
US:
- SPX; $1.42T vs $1.37T Monday.
- NDX: $48.08bn vs $43.13bn.
- Amazon: $17.05bn vs $14.18bn.
- Apple: $20.12bn vs $16.24bn.
EU:
- SX5E: €137.90bn vs €134.84bn.
- SX7E: €11.46bn vs €11.29bn.
- DAX: €31.30bn vs €30.06bn.
- FTSE: £11.14bn vs £11.07bn.
CROSS ASSET: Equities Off Lows As China Outlines Requirements For Trade Talks
Apr-16 08:45
Equities rally, bonds sell off and oil firms as BBG sources note that “China wants to see a number of steps from President Donald Trump’s administration before it will agree to trade talks, including showing more respect by reining in disparaging remarks by members of his cabinet”,
- The piece also notes that “other conditions include a more consistent U.S. position” and suggests that they want to conduct negotiations with a “point person” (akin to what was seen in Trump’s first term).
- A second round rally in equities then kicks in, with markets focused on the potential avenues to trade talks, despite some hurdles remaining.
CROSS ASSET: More upside momentum in Gold
Apr-16 08:13
- Some upside momentum in Gold, more likely short cover, than margin related move, spiked to $3307.47, and next Gold MNI Tech resistance is still at $3347.7 - 1.382 proj of the Dec 19 - Feb 24 - Feb 28 swing.
- US Tnotes at session high is helping the Yen, although USDJPY is finding some demand just ahead of the 142.00 level for now.
