American stock market indices did not make any headway in midweek. The Dow Jones Industrial closed virtually unchanged at 34'323.05 points (+0.03%) and the S&P 500 +0.21% gained +0.19% to 4'195.99 points on Wednesday. On the Nasdaq technology exchange, the indices recorded daily gains of around +0.3%. In Asia, equity markets traded lower without any new impetus. The focus remains therefore on the inflation outlook and the direction of the Federal Reserve. Still, the Fed and the ECB refer to the only temporarily higher inflationary pressure. However, there are also increasingly more voices from top central bankers that consider a change of monetary policy course appropriate. Fed Vice Chairman Richard Clarida, for example, indicated that the Fed could start discussing a reduction in securities purchases at one of the next interest rate meetings.
ECB Director Fabio Panetta opposes an early reduction in bond purchases under the Pandemic Emergency Purchase Programme (PEPP) as early as June. With demand still weak and inflation low, as well as the recent rise in yields, the ECB should continue purchases at the current increased pace until inflation and inflation expectations are in-line with the ECB's target, he said.
For the first time since US President Joe Biden took office, US and Chinese trade delegations resumed talks to resolve differences over mutual trade. There had been “frank, pragmatic and constructive exchanges” and both sides underscored the importance of trade relations. Under the Trump administration, the trade conflict had escalated, and the US accuses China of unfair trade practices, state subsidies, theft of intellectual property as well as forced technology transfer.
According to the indicator regularly compiled by the Ifo economic institute, German export industry expectations dimmed slightly in May, but from a high level. A weakening was observed in the automotive industry, the food industry and the textile and clothing sector. By contrast, exports in the electrical and mechanical engineering industries remained solid.
According to a survey by the statistics office Insee, the mood among French companies brightened considerably in May. The business climate barometer climbed by 12 points compared with the previous month to 108 points and was thus above the long-term average of 100 points for the first time in over a year. Analysts had on average expected a significantly lower value of 98 points. The indicator points to a strong expansion of economic activity, but it is not yet possible to speak of normal capacity utilization.
|08:00||GE||GfK Consumer Climate (June)||-8.8|
|10:00||IT||Business Climate (May)||105.4|
|10:00||IT||Consumer Confidence (May)||102.3|
|11:00||EZ||Business Climate (May)||1.13|
|14:30||US||GDP Q1 (q/q, annualized)||+6.4%|
|14:30||US||Consumer Spending Q1 (q/q)||+10.7%|
|14:30||US||Initial Jobless Claims (weekly)||444,000|
|14:30||US||Durable Goods Orders (April)||+1.0%|
|16:00||US||Pending Home Sales (April)||+1.9%|
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Source: LGT Bank (Switzerland) Ltd.
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