Europe Summary and Highlights 14 May
Quiet session, US retail sales next focus
European morning session
Very quiet overnight extends into the European morning with little news or action across the board.
The UK sees Mar GDP come in slightly stronger than expected at 0.3% (mkt 0.2%) and 1.1%y/y (mkt 0.8%), but seen as old news with prospects potentially dimming in Q2. BoE’s Breeden in the FT: obviously correct that we can't wait forever [on raising rates], but we don't need to do it in June or July. BoE in a good place to be able to watch what's happening in the economy. We don't need to rush to act.
No new developments on the UK leadership front yet, other than Angela Rayner declaring herself cleared by HMRC over tax avoidance to free the way to throw her hat in the ring. Gilts meanwhile have now almost backfilled Monday’s reaction gap within a few ticks.
So far nothing dramatic out of the Trump-Xi meeting (the talks were “great”). The Taiwan issue looms heavy though, China briefing after that there would ‘clashes and even conflicts, putting the entire relationship in great jeopardy’ if it wasn’t handled ‘properly’.
Asia session
While Xi rolled out the carpet and welcome Trump with waving flag, it is yet to know if the bilateral meeting will yield anything concrete. Major market is rangebound with little movement across major currency pairs. USD/JPY is trading unchanged at 157.83.
Regional equities are performing individually with U.S. major equities toes in the green. AUD/USD is down 0.04%, NZD/USD is down 0.08% while USD/CAD is unchanged with both Brent and WTI rising half a dollar per barrel. Else, EUR/USD is up 0.02% and GBP/USD is down 0.02%.