April 24, 2023

“UK property prices have fallen short of projections, with Rightmove’s report indicating only a 0.2% increase over the month, deviating from typical seasonal trends. Conversely, the German ifo Business Climate report has shown marginal growth in the eurozone, surpassing forecasts by 0.2 points. All eyes will be on the US GDP and PCE inflation data releases later this week.”

Sam Cornford, Partner – Head of Trading

Main Headlines

Credit Suisse experienced over 61 billion Swiss francs (£55 billion) in customer asset withdrawals at the beginning of the year, revealing the extent of the panic that led to its subsequent failure and emergency acquisition by UBS. These “significant withdrawals” contributed to the bank’s poor financial performance in Q1, resulting in an adjusted pre-tax loss of 1.3 billion Swiss francs compared to a profit of 300 million Swiss francs in the same period last year. Clients withdrew 9% of assets from Credit Suisse’s flagship wealth management division in the first quarter of the year.

Rightmove revealed that the asking prices for properties on sale in Britain in the past month experienced a lesser-than-usual increase for this time of year, suggesting a subdued momentum in the property market. The data showed that the average asking prices have only risen by 0.2% over the month, which is lower than the typical 1.2% gain observed during this period. Furthermore, when compared to the same time last year, asking prices were 1.7% higher, but this marked a decline from the 3.0% annual increase reported a month ago.

GBP

Sterling is well bid against most major currencies overnight. London’s FTSE 100 index declined this morning due to weak demand outlook for crude oil, which affected energy stocks, and a decrease in metal prices impacting industrial miners. Oil giants BP and Shell both lost 1.5% and 1.3% respectively, as concerns about rising interest rates, global economy, and fuel demand outweighed potential support from tighter supplies due to OPEC+ supply cuts.

EUR

The Euro is weaker than most major currencies in the early morning trade. The German ifo Institute Business Climate report, known for its large sample size and historical correlation with German and Eurozone economic conditions, was released this morning. As a leading indicator of economic health, changes in business sentiment can signal future economic activity. The forecast was 93.4, and the actual reported value was slightly higher at 93.6, indicating marginal growth in current business conditions. Later today, the Belgian equivalent report is expected to be released at 14:00 (GMT+1), providing further insight into Eurozone market business conditions.

USD

The Dollar is stronger against the Euro and weaker against Sterling this morning. House of Representatives Speaker Kevin McCarthy revealed that the House will vote on his spending and debt bill this week. McCarthy’s plan entails $4.5 trillion in spending cuts along with a $1.5 trillion increase in the U.S. debt limit, but it is expected to face rejection from Biden and the Democratic-controlled Senate. He emphasized that failure to raise the debt ceiling would result in a U.S. default on financial obligations, with severe repercussions on the global economy.

Markets

European stocks declined along with US equity futures as traders trimmed risk levels before a slew of economic data this week that may help illuminate the path forward for interest rates. The Stoxx Europe 600 edged lower at the open, with mining companies leading declines as iron ore extended a slump. Oil producers dropped as crude prices added to last week’s plunge. Koninklijke Philips NV jumped more than 10% after easing supply-chain challenges helped drive strong first-quarter earnings for the Dutch medical technology firm.

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

9:00 a.m.: Turkey April Capacity Utilization
9:30 a.m.: ECB’s Vujcic speaks
10:00 a.m.: Germany April IFO Business Climate, Expectations
10:35 a.m.: ECB’s Villeroy speaks
11:00 a.m.: ECB’s Panetta speaks
1:15 p.m.: ECB’s Vujcic speaks
3:00 p.m.: Belgium April Business Confidence
3:30 p.m.: ECB’s Panetta speaks

Corporate Events

Earnings include Coca Cola, Philips
Disney plans to cut thousands of jobs

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