Forex News

The FTSE MIB rose by 0.9% to reclaim the 34,000 threshold on Tuesday, mirroring gains seen across European markets to reach a new weekly high, driven by strong performances in the financial and technology sectors as investors found optimism in upbeat corporate earnings. Notably, major banks Unicredit and Intesa Sanpaolo saw gains of 1.5% and 1% respectively, exerting significant upward pressure on the index. Telecom Italia also grabbed attention with a more than 4% increase, on the day in which the shareholders will meet to approve the 2023 budget. Vivendi, a leading investor, plans to abstain from the shareholder vote on board renewal. Conversely, Saipem is among the biggest laggards, registering a decline of around 2%, despite showing improvements in turnover and profitability for Q1.

The ruble-based MOEX Russia index held at 3,480 on Tuesday, muted for the 2nd session, weighed by declining oil and metals prices and looming sanctions threats. The EU announced possible inclusion of a ban on the import of LNG from the country in the 14th package of sanctions. Simultaneously, the US was preparing sanctions against Chinese banks working with Russia. Domestically, the authorities confirmed the extension of exporters' capital controls until the end of 2024. However, they considered lifting the export duties for Rusal (1.9%) and purchasing the company’s products in reserve to limit the impact from the aluminum ban. In positive news, Tatneft rose by 2.3% after recommending the final payment of RUB 25.17 per share for 2023. Meanwhile, TCS advanced by 1.3%, as Interros Group supported the proposal of Tinkoff for an additional issue of shares to integrate Rosbank into the structure of MCPAO TKS Holding. Investors now turn to Sberbank dividend update and Severstal q1 results.

Top currency losers are Polish Zloty (-0.28%). In addition, there was a slight change on British Pound (0.16%), Euro (0.15%), Japanese Yen (-0.02%) and Dollar Index (-0.09%).

Frankfurt's DAX 40 index surged by 0.8% to reach the 18,000-point level on Tuesday, marking its second consecutive session of gains, as investors digested the latest PMI figures from the Eurozone along with a slew of corporate reports. Anticipation also brewed for upcoming earnings releases from the European banking and US technology sectors later in the week. The latest PMI survey for April unveiled stronger-than-expected output growth in the Eurozone, hitting its fastest pace in nearly a year, with Germany's activity expanding for the first time in 10 months. Among individual stocks, German software maker SAP soared by nearly 4% after reporting first-quarter revenues of $8.04 billion, surpassing expectations, albeit with EPS values missing forecasts.

The CAC 40 edged up by 0.3% to 8,062 on Tuesday, continuing its upward trend from the previous session, as investors digested flash PMI data and a fresh round of corporate earnings. Domestically, preliminary estimates showed that the Services PMI stabilized at 50.5 in April from 48.3 in the previous month, while the Composite PMI saw a slight improvement to 49.9 from March's 48.3. However, Manufacturing PMI further deteriorated to 44.9 from prior month's 46.2. On the corporate front, most sectors experienced gains, with Publicis leading the charge with a rise of approximately 2.3%. Additionally, shares of STMicroelectronics increased around 1.4% after Sweden’s Acconeer joined the STMicroelectronics Partner Program. Conversely, Renault was the biggest laggard, falling around 1.5%, despite its 1.8% growth in Q1 revenue. Similarly, shares of Alstom and ArcelorMittal saw declines of 1.4% and 1.1% respectively.

The annual inflation rate in Hong Kong edged down to 2% in March 2024 from 2.1% in the previous month. Inflation moderated for food (1.9% vs 2.2% in February), clothing & footwear (0.3% vs 1.3%), transport (2.2% vs 2.3%), and miscellaneous services (2.9% vs 3.6%). On the other hand, prices rose further for housing (3.1% vs 3%), alcoholic drinks & tobacco (17.7% vs 6.1%), and miscellaneous goods (1.2% vs 1%); while costs continued to fall for electricity, gas & water (-8.7% vs -7.8%), and durable goods (-1.5% vs -1.4%). The underlying inflation rate ticked down to 1% in March compared to 1.2% in the prior period. On a monthly basis, the CPI showed no growth, following a 0.4% rise in February.

The S&P Global UK Manufacturing PMI fell to 48.7 in April of 2024 from 50.3 in the previous month, below market expectations of 50.3, according to preliminary data. It marked the resumption of contraction in the UK factory activity, dimming hopes of an improving manufacturing backdrop after last month’s reading unexpectedly halted a streak of 18 consecutive monthly declines in activity. Manufacturing output declined at a slight pace in the period. This was linked to a moderate downturn in new orders, with firms noting weak market conditions being magnified by customers’ wish to destock. On the price front, input costs for factories rose at the sharpest pace in 14 months due to higher materials and transportation costs, but output charges did not rise to the same extent. Looking forward, companies signaled the lowest level of optimism in one year, remaining pressured by elevated borrowing costs.

The S&P Global UK Services PMI rose to 54.9 in April 2024 from 53.1 in March and above market forecasts of 53, preliminary estimates showed. The lastest reading indicated the sixth consecutive month of expansion in the country's services sector and the strongest in almost a year. Companies reported rising business and consumer spending, supported by a recovery in broader economic conditions. However, cost pressures intensified during the month, due to rising wages particularly in the hospitality and leisure sector. Finally, business activity expectations for the next 12 months remained upbeat.

The S&P Global UK PMI Composite Index rose to 54.0 in April 2024 from 52.8 in March, marking the most robust growth in business activity since May 2023. It was the sixth consecutive month as a robust recovery in service sector output (PMI at 54.9 vs 53.1) helped to offset a marginal decline in manufacturing production (PMI at 48.7 vs 50.3). Output growth was supported by a solid upturn in new order volumes and a modest acceleration in staff hiring, in each case driven by the service economy. April data indicated a steep increase in average cost burdens across the private sector, with the rate of inflation up sharply from March and the highest since May 2023. Stronger input price inflation was overwhelmingly linked to higher staff wages, particularly in the hospitality and leisure sector. Many survey respondents noted pressure on labour costs from a near 10% annual increase in the National Living Wage and an indirect impact on pay awards to other employees.

European equity markets traded higher on Tuesday, with the STOXX 50 rising 0.8% to 4,980 points and the broader STOXX 600 gaining about 0.6%, as investors digested flash PMI data for the Eurozone and a slew of earnings reports. The latest survey revealed stronger-than-expected output in the bloc during April, which was the fastest in nearly a year, driven by the service sector. In corporate news, French automaker Renault saw a 1.8% increase in first-quarter revenue, buoyed by robust performance in its financing division. Meanwhile, Swiss pharmaceutical giant Novartis lifted its full-year outlook following a stellar first-quarter showing, driven by sales of key products such as the heart failure medication Entresto and the psoriasis treatment Cosentyx. Additionally, software maker SAP, luxury sneaker maker Golden Goose, and logistics group Kuehne and Nagel International have also posted upbeat results.

The IBEX 35 rose by over 1% to 11,030 on Tuesday, mirroring its European peers, as investors digested mixed PMI results for largest economies and more quarterly reports. The increases were headed by Cellnex Tel (2.1%), BBVA (1.9%), Inditex (1.9%), Grifols (1.7%), and Melia Hotels (1.5%). Grifols has announced the signing of a private placement of €1 billion in 7.5% senior secured bonds, maturing in April 2030. Also, Indra Sistemas advanced by 1.3% after it was known the company was seeking to sell the majority of Minsait in an operation valued at around 1.5 billion euros, while Enagas added 0.4% on the day it presented financial figures for the Q1 of 2024, with the company\'s net profit growing by 19.5% YOY to 65.3 million euros, in line with expectations. On the negative side, steelmakers ArcelorMittal and Acerinox lost 0.8% and 0.7%, respectively.

Industrial production in Taiwan rose 3.99% year-on-year in March 2024, rebounding from an upwardly revised 1.31% decline in the previous month. Output recovered for manufacturing (4.01% vs -1.39% in February), while production increased faster for electricity and gas supply (4.28% vs 0.7%). Additionally, output fell at a softer pace for mining and quarrying (-11.63% vs -16.08%). On the other hand, production shrank for water supply (-0.58% vs 2.53%). On a seasonally adjusted monthly basis, industrial activity dropped by 0.84% in March, reversing a downwardly revised 3.33% decrease in the prior month.

Retail Sales in Taiwan slowed to 0.7% year-on-year in March 2024 from an eight-month high of 9.3% rise in the previous month. Sales sharply slowed for textiles & clothing (5.5% vs 24.2% in February), household appliances & goods (0.2% vs 9.6%), pharmaceutical & medical goods & cosmetics (3.5% vs 9.7%), and other retail sales in specialized stores (0.3% vs 5.9%). At the same time, trade eased for cultural & recreation goods (5% vs 6.5%), and retail trade not in stores or stalls (2.4% vs 3.2%). Moreover, sales tumbled for food, beverages, & tobacco (-2.8% vs 10.9%) and information & communications equipment & electrical household appliances (-2.6% vs 10.1%). On a monthly basis, retail sales grew 3.6% in March, recovering from a 12.1% drop in the prior month.

Retail sales in Poland grew by 6.1% year-on-year in March 2024, unchanged from the 21-month high seen in the previous month, but below market forecasts of 6.7%. Sales rose at a faster pace for food, beverages & tobacco (6.6% vs 1.3% in February 2024), while declining slower for textiles, clothing & footwear (-15.2% vs -21.5%). On the other hand, sales have slowed down for motorcycles & parts (13.5% vs 26.6%), solid, liquid & gaseous fuels (11.2% vs 13.4%), pharmaceuticals, cosmetics & orthopedic equipment (6.4% vs 6.9%), and others (19.4% vs 23%). Moreover, sales declined for furniture & household appliances (-8.5% vs -5.2%) and newspapers & books (-0.4% vs 2.9%). On a monthly basis, retail sales surged 14.2% in March, rebounding significantly from a 0.9% drop in the prior month.

The JSE index was up for the fourth consecutive session on Tuesday, trading above the 74,000 level, tracking most of its global peers. Investors were focused on the earnings season and key economic data from major economies set to be released during the week, including US PCE and GDP figures, alongside PMI surveys. On the domestic economic front, South Africa's leading indicator rose by 1.7% over a month in February, central bank data showed. Among single stocks, Capitec was the top advancer with gains of over 7%, after the bank reported strong results for its financial year through February 2024. Heavyweights tech Naspers and Prosus followed suit, up 5.2% and 4.6%, respectively, due to their stakes in Tencent. After announcing the release of its highly anticipated "Dungeon and Fighter" mobile game on May 21 following seven years of development, the shares of the Chinese tech giant surged by 4.5%. Conversely, resource-linked sectors underperformed.

The Hang Seng soared 317.24 points or 1.92% to end at 16,828.94 on Tuesday, rallying for the second day amid a jump of over 3% in tech shares following a rebound in its peers on Wall Street Monday. Other sectors also posted strong wins, after Beijing indicated it would support the PBoC gradually restarting to trade treasury bonds as the central bank hasn't made such trades since last October. Meanwhile, the Chinese securities regulator said it supports domestic firms to list in Hong Kong following fresh measures it launched to boost the city’s position as a financial hub. Adding to the bullish sentiment was a modest rise in US futures as investors focused on earnings following a recent rout on Wall Street due to geopolitical fears and signals that the Fed will be slow in cutting interest rates. Food delivery Meituan surged 8.0% while bellwether Tencent Hlds. jumped 3.6%. Big gains were also seen for JD.Com (6.2%), Haidilao Intl. Hlds. (3.5%), Trip.Com (3.1%), and Xiaomi Corp. (2.3%).

The HCOB Flash Eurozone Manufacturing PMI fell to 45.6 in April 2024, the lowest in four months, from 46.1 in March, and below forecasts of 46.5. The reading continued to point to a persistent contraction in the factory sector, although production fell at the slowest rate in a year and job losses have eased somewhat. Also, manufacturing input prices continued to fall, helped by improved supply conditions. Otherwise, the picture remains rather bleak, with new business continuing to decline rapidly, along with order backlogs. Weak demand for industrial products was also evident in the sharp decrease in the volume of purchased inputs and the absence of a turnaround in the inventory cycle.

Top commodity gainers are Oat (3.58%), Cheese (2.39%) and Canola (1.66%). Biggest losers are Cotton (-3.01%), Corn (-1.68%) and Rapeseed (-1.64%).

The HCOB Eurozone Services PMI reached 52.9 in April 2024, marking an eleven-month high compared to March's 51.5, according to flash estimates. New orders saw their fastest growth since May last year, increasing for the second consecutive month, while the rate of employment growth hit a ten-month high. Despite a slight uptick, service sector cost inflation remained below early-year highs, driven by higher wage rates, energy, and fuel costs. Service providers raised prices at an accelerated pace. However, business expectations for the next 12 months indicated a decline in service sector confidence to a three-month low.

The HCOB Eurozone Composite PMI rose to 51.4 in April 2024, up from 50.3 in the previous month and above the market expectation of 50.8, a preliminary estimate showed. The latest reading signals a second successive month of rising output, which was the fastest since May 2023, with service sector output increasing the most in 11 months. On the other hand, manufacturing production continued to contract, although at the slowest rate in one year. By country, Germany returned to growth, ending a nine-month period of contraction, and France recorded the weakest pace of output decline in 11 months. Inflows of new orders remained under pressure due to sharp declines in factory demand, while employment levels increased the most since last June. On the price front, both input costs and output charges rose at a faster pace in April. Looking ahead, business expectations about the coming 12 months cooled slightly compared to March but was the second-highest recorded over the past 14 months.