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A mixed session for US equity markets as investors digested key earnings reports and messaging from Fed Speakers ahead of the blackout period before the next Fed meeting.
However, there are no such concerns for key European Equity Indices, which continue to climb from March lows.
DAX
The DAX, traded above 16,000 for the first time in 15 months, continuing to be supported by decelerating inflation and firm growth. However, some cracks emerged overnight.
The April ZEW business survey showed that Germany’s current business conditions rose from -46.5 to -32.5. The forward-looking expectations index fell to 4.1 vs consensus expectations of 15.6. A second month of declines reflects uncertainty around the European banking system and credit availability.
The release on Friday night of flash Eurozone PMIs is expected to show a slight fall in the composite index to 53.4 from 53.7 in March on the back of banking concerns and strikes.
The UK
In the UK, the overnight release of the labour market report for the quarter to February showed the unemployment rate increased to 3.8% from 3.7%, a sign of rebalancing in the labour market. Concerningly, Average Weekly Earnings rose 5.9% YoY for the quarter to February, above the market forecast of 5.1%.
Attention now turns to the release this afternoon (4.00pm AEST) of UK inflation data for March, which is expected to show headline inflation fell to 9.8% from 10.4%.
Unfortunately, this is not enough of a fall to stop the Bank of England from raising rates by another 25bp at its meeting in May.
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