Morning Report

Morning Report – Friday 15th May

Main Headlines

Data from the beginning of China’s economic reopening show the pandemic’s impact on consumer sentiment will persist even after shops resume business. The slump in retail sales moderated in April to a 7.5% contraction, but it was worse than the consensus of minus 6%. Factory output, up 3.9%, beat estimates of 1.5% growth. Rising unemployment — now 6% — may continue to exert a drag on spending.

European stock futures rose with Asian equities as oil producers extended an advance after driving gains on Wall Street. Chinese shares edged higher and the yuan slipped in reaction to the mixed figures and before next week’s legislative meetings. Taiwan Semi jumped after announcing plans for a chip plant in Arizona. Treasuries held gains. Oil continued to trade higher.

The Fed bought $305 million of ETFs on the first day of its intervention into corporate debt markets. Separately, the central bank kept up pressure on Congress to increase aid to Americans. “There are going to be a lot of families that are going to need direct financial assistance,” Minneapolis Fed chief Neel Kashkari said. “A V–shaped recovery is off the table.” A central bank survey showed the pandemic is hitting poorer households the hardest.


Britain and the EU’s talks about their future relationship are stuttering, with few signs of progress being made ahead of a key deadline next Monday. The latest round of talks end Friday and the U.K. is refusing to compromise in key areas — most notably on the conditions the EU wants the country to accept in return for a trade deal, but also on fisheries and on the role of the bloc’s courts. One more round of talks remains before politicians meet in June to decide if it’s worth carrying on. British Prime Minister Boris Johnson has threatened to walk away if insufficient progress has been made by then.


Germany’s economy took a hammering in the first quarter, but today’s data may quickly be overshadowed by what looms ahead. Consensus sees GDP shrinking 2.2% on quarter, while BE forecasts a 2.9% contraction. The EU’s eastern nations fared better than their western counterparts Q1, but they still face the worst full-year slump since the days of Communism. Growth in Poland, Hungary and Romania halved, while the Czech and Slovak economies shrank. It could have been worse had they not taken decisive action and closed their borders as early as they did.


A gauge of dollar strength is poised to end the week higher amid haven demand after China retail sales and fixed-asset investment data shows the economy is still feeling the impact of the coronavirus spread. The greenback looks like posting a gain this week after two consecutive declines.

Main Economic Data/Central Banks/Government (All Times BST)

  • 7:00 a.m.: Germany April PPI
  • 7:45 a.m.: France April CPI
  • 9:00 a.m.: Germany 1Q GDP
  • 9:00 a.m.: Italy March industrial orders
  • 10:00 a.m.: Italy April CPI
  • 10:00 a.m.: Euro-Area 1Q GDP, March trade
  • 1:30 p.m.: U.S. April retail sales, May Empire Manufacturing
  • 2:15 p.m.: U.S. April industrial production
  • France sovereign debt rated by Fitch
  • U.K., EU discuss Brexit progress

Corporate Events

  • Earnings include Hapag-Lloyd, Richemont, Fortum
  • Deadline for hedge fund 13F filings