From Marc to Market:
Overview: The US dollar begins the new week on a firm note ahead of the mid-week conclusion of the FOMC meeting. Many centers are closed for the May Day holiday, making for thinner market conditions. Equities are mostly lower in the markets that traded today. This includes Japan, South Korea, Australia, and India in the Asia Pacific. In Europe, the Stoxx 600, led by a decline in information technology, industrials, and consumer discretionary sectors, is snapping a three-day advance. US futures are around 0.5% firmer. The 10-year yield is around 2.94%, while European benchmark yields are mostly a little softer except for Italian bonds. The Scandinavian currencies are bearing the brunt of the greenback's gains, but the other major currencies are also a little heavier. Emerging market currencies have also slipped lower, with the South Korean won the heaviest with around a 0.75% loss.
Gold was turned back from $1920 before the weekend and appears poised to test last week's low near $1872. June WTI was capped near $108 at the end of last week and is probing the $101.00 area today. US natgas is up about 1% after last week's almost 11% advance. European prices also seem firm today. Iron ore fell to end a four-day advance, while copper is about 2.5% lower to extend its decline for a third session. July wheat is heavier. With today's loss, it would have fallen in nine of the past 10 sessions.
Asia Pacific
Fully appreciative of the irony, but China's growth is poorer than the 1.6% quarterly increase in the January-March period implied and the US contraction of 1.4% at an annualized pace exaggerate the immediate weakness. China's April PMI released over the weekend was dreadful. The manufacturing reading fell to 47.4 from 49.5 and the non-manufacturing PMI dropped to 41.9 from 48.4. This resulted in the composite sliding to 42.7 from 48.8. It stood at 52.2 at the end of last year. There was a sharp drop in domestic and export orders highlighting the risk to Q2 growth, and supply chain disruptions were also evident. The Caixin manufacturing PMI, which tends to represent smaller businesses than the official iteration, also push further below the 50 boom/bust level. It fell to 46.0 from 48.1, with order also falling. The May Day celebration buys Chinese officials a few days to put some flesh on the bones of last week's Politburo suggestive remarks of a strong policy response....
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