EUROPEAN INFLATION: Spanish Services Stickiness Evident Beyond Easter Effects
Spanish April HICP inflation confirmed flash estimates at a rounded 2.2% Y/Y, printing at 2.24% Y/Y (vs 2.22% prior). A reminder that this was above the initial 2.0% consensus. Core HICP (excluding energy and unprocessed food) rose to 2.53% Y/Y (vs 2.00% prior), with services at 4.13% Y/Y (vs 3.11% prior) and core goods at 0.30% (vs 0.20% prior).
- As expected, the timing of Easter pushed travel sensitive services components higher. Airfare inflation was 19.3% Y/Y (vs 1.6% prior), package holidays rose to 13.7% Y/Y (vs -2.8% prior) and accommodation services ticked up to 10.0% Y/Y (vs 5.2% prior).
- Meanwhile, other services categories (e.g. insurance, rents, medical services) appeared quite sticky relative to March.
- Energy inflation was -2.47% Y/Y (vs 1.71% prior), driven by a pullback in gas inflation.
- Food inflation softened across processed (0.80% vs 1.15% prior) and unprocessed (6.22% Y/Y (vs 6.74% prior) components.
- The share of subcomponents with annual inflation rates between 1-3% fell back down to 28% in April from 30% in March, but this was driven by an increase in the number of components with rates below 1%.
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EQUITIES: Climb for EuroStoxx50 Highlights Start of Corrective Cycle
A short-term reversal in S&P E-Minis last week highlights the start of what appears to be a corrective cycle. The trend condition has been oversold following recent weakness and the move higher is allowing this set-up to unwind. Eurostoxx 50 futures traded in an extremely volatile manner last week and rallied sharply higher from recent lows. The climb highlights the start of a corrective cycle.
- Japan's NIKKEI closed higher by 396.78 pts or +1.18% at 33982.36 and the TOPIX ended 21.6 pts higher or +0.88% at 2488.51.
- Elsewhere, in China the SHANGHAI closed higher by 24.581 pts or +0.76% at 3262.808 and the HANG SENG ended 502.71 pts higher or +2.4% at 21417.4.
- Across Europe, Germany's DAX trades higher by 496.08 pts or +2.43% at 20871.52, FTSE 100 higher by 151.38 pts or +1.9% at 8116.64, CAC 40 up 146.37 pts or +2.06% at 7252.36 and Euro Stoxx 50 up 105.65 pts or +2.21% at 4894.76.
- Dow Jones mini up 397 pts or +0.98% at 40785, S&P 500 mini up 79 pts or +1.47% at 5471, NASDAQ mini up 333.25 pts or +1.77% at 19144.5.
COMMODITIES: Bearish WTI Theme Extends
The trend condition in Gold remains bullish and last week’s rally confirms and reinforces this condition. The yellow metal has traded through $3167.8, the Apr 3 high, to resume the primary uptrend and trade to fresh all-time highs. A bearish theme in WTI futures remains intact and last Wednesday's rally is - for now - considered corrective. The move higher is allowing an oversold trend condition to unwind. Recent weakness has resulted in the breach of several important support levels.
- WTI Crude up $0.14 or +0.23% at $61.59
- Natural Gas down $0.06 or -1.7% at $3.464
- Gold spot down $13.65 or -0.42% at $3223.89
- Copper up $3.05 or +0.67% at $455.35
- Silver down $0.02 or -0.07% at $32.2695
- Platinum up $8.18 or +0.86% at $956.57
EQUITIES: Pre-Market Surge for Apple Follows Sectoral Reprieve
- Strength in US equity futures has fed well into outperformance for cash European indices this morning. The reprieve for electronics imports from China into the US is the driver here, evident in early strength in the likes of Apple - whose supply chain is now spared from not only the 145% tariffs on China, but also the 10% blanket tariff applied to all other territories.
- As a result, Apple's German listing has rallied near 9%, while their US shares are higher by over 6% pre-market. Similarly, NVIDIA are higher by 3%, Intel by 2.7% and Qualcomm by 2.1%.
- Naturally, the NASDAQ-100 future is leading the bounce - higher by 1.9% to extend the bounce off the low to over 15%. A further 3% rally in the index would erase the Liberation Day sell-off.
- Equity volatility now looks to earnings season this week - (our schedule here: https://mni.marketnews.com/4cnn1GO ). Highlights are:
- Monday: Goldman Sachs
- Tuesday: J&J, Bank of America, Citigroup
- Wednesday: Abbott Labs, Progressive Corp
- Thursday: American Express, Charles Schwab, UnitedHealth, Netflix
