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🇳🇿New Zealand Services Sector Continues to Contract

The BusinessNZ Performance of Services Index in New Zealand fell marginally to a fresh 27-month low of 47.1 in April 2024 from a downwardly revised 47.2 a month earlier. Although Activity/Sales (46.5) improved slightly, New Orders/Business (47.1) continued to fall backwards, while Employment (47.1) dropped to its lowest result since February 2022. Supplier Deliveries (47.6) also dropped to its lowest point since November 2022. The proportion of negative comments from businesses continued to march upwards over April (66.3%), compared with 63% in March and 57.3% in February. BNZ’s Senior Economist Doug Steel said that “combining today’s weak PSI with last week’s PMI yields a composite reading that would be consistent with GDP tracking below year earlier levels into the middle of this year. That is what we expect and, if anything, the combined index suggests some downside risk to our forecasts”.

🇳🇿New Zealand Food Inflation Edges Up in April

The annual food inflation in New Zealand picked up marginally to 0.8% in April 2024, from a nearly 3-year low of 0.7% the month prior. Costs rose at a faster pace for non-alcoholic beverages (5.8% vs. 4.3%) and grocery food (1.8% vs. 1.7% in March) and restaurant meals and ready-to-eat food (6.4% vs. 6.7%). Additionally, deflation eased for fruit and vegetables (-13% vs. -13.3%). Conversely, costs increased slower for restaurant meals and ready-to-eat food (5.6% vs. 6.4%). Prices for meat, poultry, and fish remained unchanged at 0.2%. On a monthly basis, food prices rose by 0.6%, following a 0.5% decrease in the previous month.

🇮🇪Irish Construction Activity Growth at Over 2-Year High

The BNP Paribas Real Estate Construction PMI in Ireland increased to 53.2 in April 2024 from 51.6 in the prior month, pointing to the highest reading since March 2022. It marked the second straight month of expansion in construction output, boosted by housing and commercial projects.

🇯🇵Japanese Shares Ease as GDP Data Eyed

The Nikkei 225 Index fell 0.2% to around 38,150 while the broader lost 0.4% to 2,718 on Monday, reversing gains from the previous session as investors look ahead to Japan’s first-quarter gross domestic product report this week. Markets also turned cautious ahead of April inflation data in the US this week, which could provide clues on what the Federal Reserve’s next move could be. Notable losses were seen from index heavyweights such as Toyota Motor (-1.3%), Nippon Tel (-1%), Tokyo Electric Power (-3%), Daikin Industries (-0.4%) and Nippon Yusen (-0.9%). Meanwhile, technology, financial and consumer-related stocks mostly advanced, with gains from Disco Corp (2.1%), Mitsubishi UFJ (1.2%) and Shiseido Company (4.7%). Elsewhere, SoftBank Group jumped 2.2% ahead of its quarterly earnings report.

Gold Extends Rise on Fed Cut Hopes

Gold prices climbed near $2,360 per ounce on Monday, trading at its highest level in three weeks, fueled by expectations of a Federal Reserve rate cut following weak US employment figures. Last week, data showed a greater-than-expected rise in unemployment claims, signaling a slowdown in the labor market. This has led investors to expect the Fed to start easing in September. Traders are now preparing for April’s CPI and PPI releases due this week to gain more clarity on the Fed's monetary direction, considering concerns voiced by several Fed officials about easing. Meanwhile, the worsening Middle East tensions continued to boost the safe-haven’s appeal. On Sunday, Israel deployed tanks into eastern Jabalia in the northern Gaza Strip following a night of intense aerial and ground bombardments.

🇵🇭FDI into the Philippines Rises 29.3% YoY

Net foreign direct investment (FDI) in the Philippines advanced 29.3% year-on-year to USD 1.36 billion in February 2024, mainly due to a surge in net inflows for equity capital (927.3% to USD 0.76 billion). On the other hand, net inflows went down for reinvestment of earnings (-3.8% to USD 0.07 billion), and debt instruments (-41.5% to USD 0.53 billion). Equity capital placements for the month largely came from the Netherlands, with investments directed mostly to the financial and insurance industry. Considering January to February, FD net inflows reached USD 2.27 billion, 48.2% higher than the same period last year.

Oil Extends Fall on Demand Concerns

WTI crude futures fell below $78 per barrel on Monday, extending losses from the previous session as demand-side uncertainties weighed on the market. On Friday, oil prices tumbled more than 1% as US Federal Reserve officials signaled that interest rates could stay higher for longer, which could dampen growth and hit fuel demand in the world’s top oil consumer. Data on Friday also pointed to a sharp fall in US consumer confidence, adding to evidence that the economy is losing momentum. Moreover, US gasoline and distillate inventories rose in the week ahead of the summer driving season, indicating weak demand. Meanwhile, investors look ahead to OPEC's upcoming policy meeting in early June where the group is expected to extend supply cuts into the second half of the year.

🇰🇷South Korean Shares Start the Week Lower

The benchmark KOSPI fell 0.3% to around 2,720 points in early trade on Monday, reversing gains from the previous session, with index heavyweight Samsung Electronics leading the market lower, dropping 1.6%. Additionally, health stocks, battery makers, and online platforms faced pressure, with declines seen from Celltrion (-1.5%), LG Energy Solution (-1%), Samsung SDI (-1.1%), Naver (-2.3%), and Kakao (-1.3%). On the other hand, finance shares kicked off higher, boosted by increased optimism on the government’s corporate reform measure. Gains were led by KB Financial (4.7%), Shinhan Financial (3%), Hana Financial (4.5%), and Samsung Life (1.7%). Meanwhile, investors are maintaining a watchful stance ahead of the US CPI and PPI data due this week to gauge insights on the Federal Reserve’s future monetary policy path amid mixed signals from several Fed officials.

🇨🇳China Stocks Fall on Strong Inflation Data

The Shanghai Composite fell 0.3% to around 3,145 while the Shenzhen Component lost 0.4% to 9,690 on Monday, giving back some gains from last week as investors reacted to China’s hotter-than-expected April inflation data. Data released over the weekend showed that the country’s consumer price index rose 0.3% year-on-year last month, accelerating from a 0.1% rise in March which was also the consensus forecast. Meanwhile, producer prices declined for the 19th consecutive month. Markets also turned cautious ahead of April inflation data in the US this week, which could provide clues on what the Federal Reserve’s next move could be. Notable losses were seen from heavyweight firms such as Kweichow Moutai (-2.1%), Contemporary Amperex (-1.2%), Ping An Insurance (1%), China Vanke (-1.7%) and Kunlun Tech (-1.2%).

🇮🇩Indonesia Consumer Mood Rises to 11-Month High

Indonesia's consumer confidence climbed to 127.7 in April 2024 from 123.8 in March. It marked the highest reading since May 2023, as all six sub-indices strengthened: expectations about the country's current economic conditions (up by 5.6 points to 119.4), income expectations for current income (up 6.1 points to 124.2), job availability compared to six months ago (up 5.7 to 117.6), and income expectations for the next six months (up 1.2 to 140.6). Also, sub-indices improved for economic outlook (up 2.2 to 136.0) and job availability (up 0.8 points to 134.8).

🇨🇳Chinese Yuan Eases on Post-Inflation Data

The offshore yuan depreciated around 7.24 per dollar, responding to key economic data from China. Recent figures revealed a slight uptick in consumer prices, rising to 0.3% from 0.1% the previous month, marking the third consecutive month of consumer inflation. This increase comes amidst a gradual recovery in domestic demand, though the overall economic revival remains delicate. On the other hand, producer prices continued its downward trend, declining by 2.5%, marking the 19th consecutive month of deflation, albeit showing the slowest rate in three months. Meanwhile, investors are eagerly awaiting key economic data from the US later this week, seeking deeper insights into the Federal Reserve's interest rate outlook.

🇮🇳India Shares Trade at 3-Month Low

Equities in India fell 667.2 or 0.9% to its lowest level since February 14 of 72,002.8 in early trade on Monday, with Nifty 50 below 22,000, after gaining in the previous session weighed by losses from auto, metals, realty, consumer durables, and oil

🇫🇮Finland Current Account Gap Widens Sharply

Finland's current account deficit sharply widened to EUR 1,139 million in March 2024 from EUR 226 million in the corresponding month of the previous year. It was the largest current account gap since April 2023, as the goods account posted a deficit of EUR 242 million, shifting from a surplus of EUR 1,011 million in the prior year. Additionally, the secondary income gap widened to EUR 236 million from EUR 227 million. Meanwhile, the services deficit narrowed to EUR 720 million from EUR 766 million, while the primary income swung to a gain of EUR 59 million from a gap of EUR 245 million.

Palm Oil Snaps Three-Session of Losses

Malaysian palm oil futures jumped over 1.5% to near MYR 3,880 per tonne, rising for the first session in four amid strength in rival edible oils on the Dalian exchange. Meanwhile, domestic demand in key buyer China improved further, as highlighted by the third straight month of consumer inflation last month. In top buyer India, palm oil purchases soared 41% in April to a three-month peak. A further drop in crude oil prices capped the rise, along with growing caution ahead of monthly crop production data in the US and World Agricultural Supply and Demand Estimates reports. On the export side, shipments of Malaysian palm oil products for May 1-10 fell between 14.2 to 14.8% from the same period in April, according to Intertek Testing Services and AmSpec Agri Malaysia. Last week's data from the industry regulator showed that at the end of April, the country's exports of palm oil products shrank 6.97 from the prior month to 1.23 million tons.

European Markets Set for Positive Open

European equity markets were set for a positive open on Monday, extending last week’s gains as investors look ahead to a key US inflation reading this week for insights on the Federal Reserve’s monetary policy path. Meanwhile, there are no major data releases in Europe on Monday, while investors will assess Ferrovial’s earnings report. Euro Stoxx 50 futures rose about 0.15% in premarket trade.

🇹🇷Turkey Current Account Gap Narrows in March

Turkey’s current account deficit narrowed to $4.54 billion in March 2024 from $5.25 billion in the corresponding month of the previous year. The goods shortfall declined to $5.19 billion from $6.37 billion a year earlier, while the primary income gap rose to $1.6 billion from $1.35 billion. Meanwhile, the secondary income surplus narrowed sharply to $0.01 billion in March from $0.08 billion and the services surplus edged down to $2.24 billion from $2.4 billion. Excluding gold and energy, the current account surplus increased to $0.8 billion from $0.6 billion in the same month of the previous year.

🇨🇭Switzerland Consumer Morale Little-Changed in April

The consumer confidence indicator in Switzerland was nearly unchanged at -38.1 in April 2024 from -38.0 in the previous month, remaining significantly below the long-term average and compared to market forecasts of -40.0. Pessimism eased in the gauge of expected economic development (-21.2 vs -22.6 in March), and concerns were lessened about job security (-21.0 vs -22.1). Meanwhile, there was a deterioration in the gauges for expected financial development (-36.2 vs -35.1), and expected price development in the next 12 months (95.9 vs 94.8). Also, consumers were also more unlikely to make big purchases (-37.2 vs -36.4).

🇬🇪Georgia Trade Deficit Expands in April

Georgia's trade deficit expanded to USD 924 million in April 2024 from USD 724 million in the corresponding month a year earlier. Imports fell 12.5% year-on-year to USD 1,361.8 million, while exports grew by 11.2% to USD 437.9 million. In the first four months of the year, the country's trade gap amounted to USD 6,536.7 million, with sales dropping by 10.1% and purchases rising by 0.3%.

🇬🇧FTSE 100 Rises to Record High

The FTSE 100 edged above the flatline to hover near the 8,445 mark on Monday, extending the sharp 2.5% gain in the prior week to set up a new record close as equities continued to benefit from the outlook of a more dovish Bank of England and positive corporate developments. Industrial components supplier Diploma led the gains in the session, with its shares surging by nearly 6% after the company raised its revenue and margin guidance for the year, aligned with strong results for the financial year. Additionally, the Unite Group was 0.5% higher after announcing it sold six properties in key cities for GBP 184 million. Also, airline conglomerate IAG was nearly 1% higher after Heathrow Airport reported strong passenger volumes for April, on pace for a record high this year. Still, NatWest dropped 0.3% after the UK Government said it aims to speed the sales of its stake in the bank. Also, heavyweight industrial miners were mostly in the red, with Fresnillo and Rio Tinto down close 1%.

🇧🇬Bulgaria Trade Gap Widens Sharply in March

Bulgaria’s trade deficit widened to BGN 1,279.5 million in March 2024, more than doubling from BGN 630.2 million in the corresponding month of the previous year, preliminary estimates showed. Exports declined 10.4% year-on-year to BGN 7,138.6 million, pressured by decreased shipments to both the EU (-10%) and non-EU countries (-11.1%). Meanwhile, imports dropped at a softer 2.1% year-on-year to BGN 8,418.1 million, as purchases rose from the non-EU countries (20%), while arrivals declined from the EU countries (-14.6%). In the first three months of the year, the country’s trade shortfall widened to BGN 3,824.8 from BGN 2,372.9 in the same period of the previous year.

🇫🇷French Stocks Slip Ahead of US Inflation Data

The CAC 40 fell 0.06% to 8,215 on Monday, breaking its streak of six consecutive gains from the previous week. Investor attention is focused on the eagerly awaited US inflation figures, hoping to glean insights into the Federal Reserve's future monetary policy decisions. On the corporate front, Sanofi experienced the most significant decline, with its shares falling nearly 3%, following reports of the French pharmaceutical giant's substantial investment of $1.08 billion to enhance drug production in France, effectively doubling its capacity for monoclonal antibody production. Additionally, Airbus shares dipped around 1.3%, following comments from the CEO of Lufthansa, who highlighted the considerable financial impact of delays in aircraft deliveries from Boeing on the German flag carrier. On a positive note, Stellantis NV saw a nearly 3% increase, leading the upward trend. Societe Generale and Renault also experienced gains, increasing 2.2% and 2%, respectively.

🇮🇹Italian Bourse Extends Last Week Gains

The FTSE MIB rose 0.3% to trade nearly the 34,800 threshold on Monday, building upon last week's 3% surge to nearly reach highs not seen since 2008, as investors await upcoming US inflation data, alongside first-quarter GDP and employment figures for the Euro Area. On the corporate front, Diasorin remains one of the top performers, with a gain of over 3%, as several investment banks revise their outlook following the release of its financial results last week. Stellantis ( 3.4%), Nexi ( 1.6%), and Telecom Italia ( 1.4%) have also performed well thus far. Conversely, Leonardo and Iveco Group experienced significant declines, with both companies seeing drops of around 4% and 3% respectively.

🇷🇺MOEX Trades with Modest Gains

The ruble-based MOEX Russia index rose to 3,460 on Monday, advancing for the 3rd session, supported by higher oil prices. Meanwhile, investors digested fresh corporate updates and awaited the monthly inflation reading later in the week to get a better understanding of CBR's monetary policy. Among individual stocks, Mechel (1.8%), Ozon (1.5%), Unipro (1.4%), Aeroflot (1.3%), and Gazprom (1.3%) increased the most. On the negative side, Ros Agro (-3.2%), Seligdar (-1.1%), Inter (-1.1%), MOEX (-0.8%), and Polus (-0.8%) declined. The former was penalized by disappointing financial results, with the company's net profit plunging by 68% to RUB 3,677 million in the Q1 of 2024 compared to the same period of 2023. Ros Agro's board also decided not to pay dividends for 2023 and focus on growth. In other news, M.Video's (1.1%) board approved an additional issue of 30 million shares, which is 17% of the capital; the main shareholder, SFI, previously agreed to buy the issue.